The current exchange rate between the Japanese yen and the U$.$S$.$ dollar is $120$ yen per dollar. If the dollar is expected to depreciate by $10\%$ relative to the yen, what is the new expected exchange rate? Short$-$term interest rates are $2\%$ in Japan and $4\%$ in the United States. The current exchange rate is $120$ yen per dollar. What is the expected forward exchange rate? I have seen this question answered as $117\mathrm{.}6$ and $122\mathrm{.}35.$ I$\text{'}$m not sure which one is right or how they arrived there.