The Effects Policy Changes in Japan. Until the early 1980s, Japan required its large insurance companies to invest all of their vast holdings in Japanese securities. At the prompting of the United...

The Effects Policy Changes in Japan. Until the early 1980s, Japan required its large insurance companies to invest all of their vast holdings in Japanese securities. At the prompting of the United States, Japan relaxed the restrictions and allowed the companies to invest anywhere in the world. What effect do you think this had on the yen/dollar exchange rate and the trade balance between the two countries?