The two countries I researched were the United States and Japan. The US dollar to Japanese Yen exchange rate is currently 108.77 JPY per 1 USD (Oanda, 2019). The Japanese yen to US Dollar exchange rate is 0.009184 JPY per 1 USD (Oanda, 2019). If a business was considering operations in either country, the most favorable exchange rate would be that of the US to Japan as it offers more value for their dollar when exchanging currency.
For example, if a business based in the United States had $10 million they wanted to convert into yen, they could do so at an exchange rate of 108.77 JPY per 1 USD meaning they would end up with ¥1,087,700,000 when converting their dollars into yen (Oanda, 2019). If however that same business based in the United States wanted to convert 10 million Japanese yen back into dollars using the current exchange rate of 0.009184 JPY per 1 USD then they would end up with only $892,800 (Oanda 2019). This makes it very clear why operating from the perspective of a US-based company would be much more financially beneficial than one based in Japan as far as currencies are concerned due to its better overall value for money when exchanging currency between them both.
Identify the two countries that you researched and each country’s exchange rate. Indicate which country’s exchange rate would be the most favorable for business operations.
Another reason why doing business from within the United States may be more advantageous is because of its strong economic standing in comparison to other countries such as Japan which has been struggling economically since 2014 (“Japan’s Economy”, 2018). A stronger economy generally equates to higher levels of consumer spending which can directly benefit businesses depending on what goods and services they offer making it an even more viable option for companies looking at setting up operations overseas who want access to a large pool of potential customers or clients (“Economic Factors”, nd.).
In conclusion; conducting foreign operations from within the United States rather than any other country such as Japan offers many advantages including having access to one of strongest economies among developed nations and also being able to achieve maximum value for money by taking advantage of its favourable currency conversion rates compared to those available elsewhere throughout world markets like those offered when converting dollars into japanese yen and vice versa .