Suppose that the U.S. interest rate is 4%, interest rates in Japan are 2%. Below you can locate the appropriate spot exchange rate. In order for covered interest parity to hold, what would the Forward (Japanese yen/USD) exchange rate need to be? As I promised, the uncovered interest parity box diagram is reproduced below for your convenience.

Suppose that the U.S. interest rate is 4%, interest rates in Japan are 2%. Below you can locate the appropriate spot exchange rate. In order for covered interest parity to hold, what would the Forward (Japanese yen/USD) exchange rate need to be? As I promised, the uncovered interest parity box diagram is reproduced below for your convenience. (1+i us ) $ 1 1 Esle Es& E (1+i europe) - US$VS, Mon YTD chy YTD chg Mon Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Americas Vietnam dong .00004408 22685 -0.7 Europe Argentina peso .0096104.4893 1.8 Brazil real .1822 5.4882 -1.5 Czech Rep. koruna .04617 21.659 -1.0 Canada dollar .7912 1.2639-0.02 Denmark krone .1521 6.5730 0.5 Chile peso .001239 807.36 -5.2 Euro area euro 1.1326 8830 0.4 Colombiapeso .000252 3971.33 -2.3 Hungary forint .003137 318.78 -1.8 Ecuador US dollar 1 1 unch Iceland Krona .007778 128.57 -0.9 Mexico Peso .0486 20.5770 0.4 Norway Krone .1116 8.9569 1.7 Uruguay peso .02245 44.5500 -0.4 Poland zloty .2481 4.0314 0.1 Asia-Pacific Russia ruble .01269 78.817 5.4 Sweden krona . 1080 9.2625 2.3 Australian dollar .7144 1.3998 1.7 Switzerland franc 1.0941 9140 0.2 China yuan .1580 6.3308 -0.4 Turkey lira .0742 13.4701 1.1 Hong Kong dollar .1284 7.7862 -0.1 Ukraine Hryvnia .0351 28.4500 4.0. India rupee .01340 74.616 0.1 UK pound 1.3490.7413 0.3 Indonesia rupiah .0000697 14343 0.6 Japan yen .008774 113.98 -1.0 Middle East/Africa Kazakhstan tenge .002288 437.11 0.5 Bahrain dinar 2.65293770 unch Macau pataca .1246 8.0235 -0.2 Egypt pound .0637 15.7107 Malaysia ringgit .2387 4.1890 0.6 Israel shekel 3161 3.1640 1.8 New Zealand dollar.6701 1.4923 2.1 Kuwait dinar 3.3067 3024 -0.1 PakistanTupee .00567 176.365 0.1 Oman sul rial 2.5974 3850 Philippines Peso .0195 51.400 0.8 Qatar rial .2746 3.641 -0.02 Singapore dollar .7430 1.3459 -0.2 Saudi Arabia riyal .2666 3.7513 -0.1 South Korea won .0008363 1195.69 0.6 South Africa rand .0655 15.2597 -4.3 Sri Lanka rupee 0049527 201.91 -0.5 12 Suppose that the U.S. interest rate is 4%, interest rates in Japan are 2%. Below you can locate the appropriate spot exchange rate. In order for covered interest parity to hold, what would the Forward (Japanese yen/USD) exchange rate need to be? As I promised, the uncovered interest parity box diagram is reproduced below for your convenience. (1+i us ) $ 1 1 Esle Es& E (1+i europe) - US$VS, Mon YTD chy YTD chg Mon Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Americas Vietnam dong .00004408 22685 -0.7 Europe Argentina peso .0096104.4893 1.8 Brazil real .1822 5.4882 -1.5 Czech Rep. koruna .04617 21.659 -1.0 Canada dollar .7912 1.2639-0.02 Denmark krone .1521 6.5730 0.5 Chile peso .001239 807.36 -5.2 Euro area euro 1.1326 8830 0.4 Colombiapeso .000252 3971.33 -2.3 Hungary forint .003137 318.78 -1.8 Ecuador US dollar 1 1 unch Iceland Krona .007778 128.57 -0.9 Mexico Peso .0486 20.5770 0.4 Norway Krone .1116 8.9569 1.7 Uruguay peso .02245 44.5500 -0.4 Poland zloty .2481 4.0314 0.1 Asia-Pacific Russia ruble .01269 78.817 5.4 Sweden krona . 1080 9.2625 2.3 Australian dollar .7144 1.3998 1.7 Switzerland franc 1.0941 9140 0.2 China yuan .1580 6.3308 -0.4 Turkey lira .0742 13.4701 1.1 Hong Kong dollar .1284 7.7862 -0.1 Ukraine Hryvnia .0351 28.4500 4.0. India rupee .01340 74.616 0.1 UK pound 1.3490.7413 0.3 Indonesia rupiah .0000697 14343 0.6 Japan yen .008774 113.98 -1.0 Middle East/Africa Kazakhstan tenge .002288 437.11 0.5 Bahrain dinar 2.65293770 unch Macau pataca .1246 8.0235 -0.2 Egypt pound .0637 15.7107 Malaysia ringgit .2387 4.1890 0.6 Israel shekel 3161 3.1640 1.8 New Zealand dollar.6701 1.4923 2.1 Kuwait dinar 3.3067 3024 -0.1 PakistanTupee .00567 176.365 0.1 Oman sul rial 2.5974 3850 Philippines Peso .0195 51.400 0.8 Qatar rial .2746 3.641 -0.02 Singapore dollar .7430 1.3459 -0.2 Saudi Arabia riyal .2666 3.7513 -0.1 South Korea won .0008363 1195.69 0.6 South Africa rand .0655 15.2597 -4.3 Sri Lanka rupee 0049527 201.91 -0.5 12