Most people looking to purchase a Toyota or Nissan just don't care about the value of the Yen vs. the Dollar. It just isn't relevant. For automakers here and in Europe, however, it's a very big deal. The Auto Trade Policy Council estimates a Japanese auto manufacturer advantage of $9,000 on luxury vehicles imported from Japan and $2,000 on lower-end imports. Japanese manufacturers have smartly used the imbalance to add content to their products while maintaining the price of their competition. Customers are getting more for their money and Toyota, Honda and company are getting lauded for high quality materials.
The Yen is worth less than the Dollar because the current national interest rate in Japan is .5 percent, close to what the rate was in the US only a couple years ago. Right now, however, the US interest rate is at 5.25 percent. In Europe, the rate is 3.5%. Investors borrow Yen at low rates then sell the currency and put the money into higher interest accounts like US treasury bonds. As a result, the yen is devalued by up to 25% and Japanese goods are cheaper for Americans.
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