Explain how the expected future exchange rate will change. Suppose that the inflation rate is lower in

Question:

Explain how the expected future exchange rate will change.

Suppose that the inflation rate is lower in Japan than it is in the United States, and that the difference in the inflation rates persists for some years.

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...