Historical Currency Exchange Rate - Essay Example

The currency values of USD to JPY were obtained from Oanda.com

7/12/2008 – 106.7960

7/13/2008 – 106.3260

7/14/2008 – 106.3210

7/15/2008 – 106.4590

7/16/2008 – 105.4150

7/17/2008 – 104.5260

7/18/2008 – 105.4420

7/12/2007 – 121.7240

7/13/2007 – 122.3210

7/14/2007 – 122.3350

7/15/2007 – 121.9870

7/16/2007 – 121.9860

7/17/2007 – 121.8970

7/18/2007 – 122.0370

7/12/2006 – 114.2420

7/13/2006 – 114.7980

7/14/2006 – 115.3380

7/15/2006 – 115.870

7/16/2006 – 116.1620

7/17/2006 – 116.1620

7/18/2006 – 116.7020

3. Give your opinion about whether or not a company doing business in your country should hedge its currency or not?

The company I’m investigating is located in Japan. The Yen last year was very strong against the dollar. It gains purchasing power last year reference to two years ago. Now things have changed, the Yen has considerably gone down in comparison with the dollar. Another alarming factor is the intra-day fluctuations in the value of the Yen. In a seven-day period during the last week, the difference between the high point value and the low point value was 2.24 Yen or about 2.1%. This is not a good sign and the company doing business in Japan should play a hedging game to ensure the stability of its sales value.