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Derek is attempting to determine whether U

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Derek is attempting to determine whether U.S./Japanese financial conditions are at parity. The current spot rate is a flat ¥109.00/$, while the 360-day forward rate is ¥104.90/$. Forecast inflation is 0.500% for Japan, and 1.900% for the United States. The 360-day euroyen deposit rate is 0.700%, and the 360-day eurodollar deposit rate is 2.500%. Calculate whether international parity conditions (i.e. Interest Rate Parity and Purchasing Power Parity) hold between Japan and the United States.