Assume uncovered interest rate parity holds. Currently the interest rate on one-year, yen-denominated Japanese bonds is 8%, the interest rate on one-year, dollar-denominated U.S. bonds is 4%, both bonds have no risk of default, and the spot exchange rate (EX) is 100 yen per dollar.What is the market expecting EX will be one year from now?What would be the likely effect on EX and the U.S. one-year rate today if today the Japanese central bank unexpectedly raised its one-year rate to 10% and kept it at this level? Explain your reasoning making any assumptions explicit.