Assume that the current exchange rate for Japanese Yen and U$.$S$.$ Dollar is $140$ JPY per USD.

According to the International Fisher Effect $($IFE$),$ if interest rates are higher in the United

States than in Japan, what should we expect what for that exchange rate?

We should expect no change in the exchange rate.

We would expect the exchange rate to move above $140JPY$ per USD.

IFE does not apply to this situation.

We would expect the exchange rate to move below $140$ JPY per USD.