Let's use particular numbers to contrast the effectiveness of foreign exchange funds and foreign currency deposits.
If you buy 1,101 US dollars in foreign currency deposits and convert (return) to yen when it becomes 1 yen, 1,100 yen will be lucrative when the USD/JPY rate is 1 USD = 100 yen. Similar to this, on the forex market, if you buy 1,101 US dollars at 1 US dollar = > JPY then sell and settle at > yen, you'll make >, > yen in profit (neither transaction accounts for costs).
[Profit when purchasing 10,000 yen at 100 yen and then selling it at 101 yen]
10,000 different currencies divided by (101 yen – 100 yen) yield 10,000 yen (* Profit is the same for both FX and foreign currency deposits).
