Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)

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Assessing the Global Currency Market’s Response to the Federal Reserve’s Interest Rate Cuts: A Comparative Analysis of RMB and JPY Exchange Rate Volatility

Authors
Yuhui Lin1, *
1Lee Shau Kee School of Business and Administration, Hong Kong Metropolitan University, Hong Kong, 999077, China
*Corresponding author. Email: lyuhui888@gmail.com
Corresponding Author
Yuhui Lin
Available Online 3 July 2025.
DOI
10.2991/978-94-6463-748-9_46How to use a DOI?
Keywords
Interest Adjustment; Federal Reserve; VAR Model
Abstract

This paper examines the impact of the US Federal Reserve’s interest rate cuts on global exchange rates, with a particular focus on the impact on major currencies such as the renminbi and the yen. The analysis includes a comprehensive examination of how interest rate cuts affect exchange rate volatility and assesses the potential impact on international trade and cross-border investment. The study draws conclusions through literature review, hypothesis testing and data analysis. The results of the study indicate that although there was some volatility in the exchange rates of the currencies after the Federal Reserve’s interest rate cuts, regression analyses and t-tests showed that there was no significant difference in the exchange rate changes before and after the adjustments. The study also pointed out the shortcomings in methodology and data selection, suggesting that future research could explore the different channels through which the Fed adjusts its interest rate policy and its impact on the business cycle.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
3 July 2025
ISBN
978-94-6463-748-9
ISSN
2352-5428
DOI
10.2991/978-94-6463-748-9_46How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Yuhui Lin
PY  - 2025
DA  - 2025/07/03
TI  - Assessing the Global Currency Market’s Response to the Federal Reserve’s Interest Rate Cuts: A Comparative Analysis of RMB and JPY Exchange Rate Volatility
BT  - Proceedings of the 2025 International Conference on Financial Risk and Investment Management (ICFRIM 2025)
PB  - Atlantis Press
SP  - 417
EP  - 424
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-748-9_46
DO  - 10.2991/978-94-6463-748-9_46
ID  - Lin2025
ER  -