Why is 1 brazilian real (currency), greater than a japanese yen?

Question

I saw an exchange rate chart today and I found that 1 brazilian real equals 67.70 japanese yens, if japan's economy is bigger that brazil's shouldn't it be the other way around?

Answer 1

You make the mistake of thinking that if two economies are the same size, their currencies should have the same value.  That is not the case.

The real is simply a larger "unit of wealth" then the Yen is. Like if something costs 100 reals in Brazil, the same thing would likely cost 7000 yen in Japan.   Similarly a middle class salary could be 50000 reals in Brazil but 5000000 yen in japan.

If Japan decided one day to invent a "new Yen" whose value is 100 of the old yen (countries with serious inflation problems do this a lot) then the new Yen would simply be a bigger unit of wealth, one real would be worth 0.677 new Yen, but nothing really fundamental would have changed.  They'd just be using different units to measure the same thing.

Whether one currency is rising or falling compared to another currency is important economically, but the particular exchange rate is not important.