Let me share smthing! Currencies, just like any other commodity that can be bought or sold, are subject to the laws of supply and demand. When more people want a particular currency, the cost of the currency in terms of other currencies will go up. When demand decreases or people do not want to hold a country's currency, the value will go down. One factor that directly affects demand for a currency is international trade. For instance, if I buy a Japanese car in the US, I give dollars to my dealer, who gave dollars to his distributor, and so on. But before the profits are banked by the carmaker in Japan, they are converted into Yen. There is a surge of buying of Japanese cars this month, the result is going to be increased demand for Yen-which will in turn cause an appreciation in the Yen's value. An increase in international investment into Japan would have the same effect, since more money is being converted into Yen to purchase Japanese assets.