Yen depreciation â†' Japan exports:

Higher real interest rates generally do not cause capital to flow out; instead, they make investment within the country more attractive. If capital were to flow out, it would typically be due to lower interest rates or unfavorable economic conditions, which is the opposite scenario in this case.

The scenario of "no flow" of capital is unlikely in the context of higher real interest rates. Typically, changes in interest rates lead to some level of capital movement, either flowing in or out, depending on the economic conditions. Therefore, the claim that there would be no flow is inconsistent with economic principles.

The term "reverse" suggests a situation where capital would leave the country in opposition to what is expected with rising interest rates. In reality, higher real interest rates do not cause capital to reverse but rather encourage inflow. A reverse flow would indicate a decline in investment attractiveness, which contradicts the economic rationale for increased rates.