How does USD to yen currency exchange work?

i wanted to buy something from japan with a shopping service and i noticed that the usd to yen rate is not balanced.


i was wondering when this would balance out, and how does it happen?


i know in 2008 when i purchased something directly from japan it was about the same price but now it seems $1 is about 80 yen.


can someone help me? thanks!|||From the Japanese expert corner, the Yen-$ exchange rate should be around 85-95 at the average this year. You can wait until the end of the year to confirm that they would be right.In the last 2 weeks, due mainly to the Tsunami in Japan, the Yen was popped up to 76 Yen a dollar. The Nikkin has asked all central banks in G7 to help stabilizing the Yen market. It has gone down to 80Yen 79 sen ,or 80.79 Yen a dollar today.I expect that it is likely to be around 80-81 for months.|||No, in 2008 the Yen/Dollar was most definitely not 1:1, have no idea where you got that idea. It was close to today's value, maybe 90 Yen to 1 dollar at that time. If you ordered something from Japan, it must have already had its dollar-price listed or that exchange was done for you without you realizing it.



The exchange rate is already "balanced" -- the balance of value between the two currencies is 80 Yen = $1. That is the balance.



There is absolutely no reason to expect one Yen ever to equal one dollar. Different country's currencies have different unit values, just like the countries have different names and their people speak different languages. There is no force whatsoever tending to align currency unit values into a 1:1 ratio.



"How it works" is when you go to Japan, you hand a currency exchange window $1 and they give you 80 Yen that you can spend.|||There is no such thing as balance in currency markets. The better term would be, "It is what it is". The Yen is at 80yen to the dollar because there are more people buying yen then dollars. The reason is because of the earthquake/tsunami. Japan has lots of money invested in dollars. So when devastation hits and you need cash, guess what happens? You sell your US dollar denominated assets for USDs, then Buy Yen with your USDs, which makes the dollar decline in value and the Yen rise in value.





At one point, the Yen was at 76/yen to the dollar. In any case, I wouldn't expect the yen to decline far beyond the 80/yen level until life in Japan gets back to normal. Actually, the yen might become more expensive, so I'd recommend buying stuff now because it costs even more.