In the past month, the Saudi Arabian Riyal (SAR) has been showing a consistent upward trend against the Japanese Yen (JPY). This comprehensive report aims to analyze the factors behind this rise and provide actionable insights for forex investors.
Global Economies
The market trends suggest that the Saudi Arabian economy is performing better than the Japanese economy. This is evident from the GDP growth rate of both countries, where Saudi Arabia has been recording a steady growth rate of 2% on average, whereas the Japanese economy has been going through a period of decline for the past couple of years. This has resulted in higher demand for the Saudi Arabian Riyal and lower demand for the Japanese Yen.
Politics Involved
Another significant factor that has impacted the currency exchange rate between these two countries is recent political events. The recent normalization of diplomatic relations between Saudi Arabia and Israel has brought more investment opportunities into Saudi Arabia.
These investments have brought in a significant amount of foreign exchange reserves, further strengthening the value of the Riyal. On the other hand, Japan has been facing challenges regarding its economic and political relationships with its neighboring countries, which has hampered its economic growth.
Regional Changes
Saudi Arabia has recently launched Vision 2030, a strategic plan aimed at diversifying its economy and reducing its dependence on oil. This has led to increased foreign investment and economic growth, further strengthening the Riyal. Japan, on the other hand, is facing a shift towards stringent regulations, which has negatively impacted its economy.
The Prediction
The consistent rise of the Saudi Arabian Riyal against the Japanese Yen can be attributed to a combination of factors. Overall they have resulted in higher demand for the Riyal and lower demand for the Yen. As the Saudi Arabian market continues to grow, it is likely that the Riyal will continue to strengthen. The Japanese Yen on the other hand faces severe challenges ahead.
Author Profile
- Lucy Walker covers finance, health and beauty since 2014. She has been writing for various online publications.
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