A decline in the real USDJPY exchange rate most likely:
Increases a U.S. investor’s purchasing power relative to a Japanese investor’s.
Increases a Japanese investor’s purchasing power relative to a U.S. investor’s.
Increases the JPY‐denominated value of a Japanese investor’s investments in the United States.
You Answered Correctly!
A decline in the USDJPY real exchange rate means that it now costs a Japanese investor less in real terms to buy U.S. goods. Therefore, in relative terms, the Japanese investor’s purchasing power has increased.
A decrease in the USDJPY nominal exchange rate decreases the JPY‐denominated value of a Japanese investor’s investments in the United States.
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In my opinoin second answer is right one.