Effects Of Japanese Quantitative Easing Monetary Policy On Exchange Rate Of Japan

The21stcentury has witnessed twice easing quantitative monetary policy in Japanso far. One is between Mar,2001and Mar,2006, the other began in2008and followedby ongoing policy issued by Shinzo Abe and his cabine. Targets of the first policy are:maintaining an ample liquidity supply by using the current account balances, conditionalcommitment and shifting target of monetary policy. And the second policy has threearrows: bold monetary policy, flexible fiscal policy and stimulation on private investment.This Economic growth strategy will concentrate on Japanese exchange rate appreciationcontrol and inflation expectation creation. During these two stages, Japanese exchangerate both has a obvious fluctuation.The thesis aims to analyze the influence of quantitative easing policy on Japaneseexchange rate in the mentioned two stages. Qualitative and quantitative methods are used.By summarizing existing theories of monetary policy and exchange rate determination,the thesis provides two model of impact of monetary policy on exchange rate. Bydescribing the status quo of Japanese quantitative easing monetary policy and exchangerate, the thesis give a basic recognize. Using quantitative methods, the correlativity ofquantitative easing monetary policy and Japanese exchange rate is given. And that is usedto analyze the current Japanese exchange rate situation and make a prediction.