Three-years ago the USD/JPY exchange rate was 107.55 and today the exchange rate now sits at USD/JPY 133.83. Three-years ago the USD/ARS exchange rate was 65.38 and today the exchange rate now sits at USD/ARS 213.11.

Japanese inflation has been at rates of -0.5%, 0.9% and 3.3% over the last 3 years. In Argentina, the inflation rates have been 48%, 95% and 104%.

(a) What is the total percentage change of the JPY against the Peso in nominal terms over the last 3 years.

(b) Calculate today's real FX value of the JPY against the Peso adjusted for the past three year's inflation differential (show all working). Your goal is to find a value comparable to the exchange rate three years ago.

(c) Has the JPY appreciated or depreciated in real terms over the three-year period against the Peso? You must demonstrate and explain how it is that you know this. By how much has the JPYs value changed in real terms (answer as a percentage)?