Question: 5. The following chart shows the numbers on the average nominal (NER) and real exchange rate (REER) of the Japanese Yen against several foreign currencies

5. The following chart shows the numbers on the average nominal

5. The following chart shows the numbers on the average nominal (NER) and real exchange rate (REER) of the Japanese Yen against several foreign currencies (such average index numbers are called real effective exchange rates): CHAPTER 5 Price Levels and the Exchange Rate in the Long Run 163 2011 105.7 2012 107.2 2013 87.1 2014 81.5 2015 76.6 2016 93 NER 101.3 100.0 79.7 75.1 70.3 83.6 REER Base 100 in 2010. Source: http://www.bis.org/statistics/tables_i.pdf Since December 2012, Japan has a new Prime Minister, Shinzo Abe, who has introduced a new economic policy (the abenomics) advocating, besides struc- tural reforms, an aggressive monetary easing to foster the economic growth that has been very low since several years. Explain the evolution of the exchange rate of the Yen in this context

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