S-1/A

As filed with the Securities and Exchange Commission on January 5, 2007

Registration No. 333-138881

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1 TO

FORM S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

CurrencyShares^SM Japanese Yen Trust

Sponsored by Rydex Specialized Products LLC,

d/b/a Rydex Investments

(Exact name of Registrant as specified in its charter)

New York

(State or other jurisdiction of incorporation or organization)

6189

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer Identification No.)

9601 Blackwell Road

Suite 500

Rockville, Maryland 20850

Phone: (301) 296-5100

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Carl G. Verboncoeur

CEO and Treasurer

Rydex Investments

9601 Blackwell Road

Suite 500

Rockville, Maryland 20850

Phone: (301) 296-5100

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

George T. Simon, Esq. Foley & Lardner LLP 321 N. Clark Street Suite 2800 Chicago, IL 60610-4764 Phone: (312) 832-4500 Fax: (312) 832-4700 Patrick Daugherty, Esq. Foley & Lardner LLP One Detroit Center 500 Woodward Ave, Suite 2700 Detroit, MI 48226-3489 Phone: (313) 234-7100 Fax: (313) 234-2800

Approximate date of commencement of proposed sale to the public:    As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and the Sponsor and the Trust are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Preliminary Prospectus Subject to Completion January 5, 2007             

150,000 Shares
Japanese Yen Shares

The CurrencyShares^SM Japanese Yen Trust (Trust) issues Japanese Yen Shares (Shares) that represent units of fractional undivided beneficial interest in, and ownership of, the Trust. Rydex Specialized Products LLC, d/b/a “Rydex Investments”, is the sponsor of the Trust (Sponsor) and may be deemed the “issuer” of the Shares pursuant to Section 2(a)(4) of the Securities Act of 1933, as amended (the Securities Act). The Bank of New York is the trustee of the Trust (Trustee), JPMorgan Chase Bank, N.A., London Branch is the depository for the Trust (Depository), and Rydex Distributors, Inc. is the distributor for the Trust (Distributor). The Trust intends to issue additional Shares on a continuous basis through the Trustee.

The Shares may be purchased from the Trust only in one or more blocks of 50,000 Shares, as described in “Creation and Redemption of Shares.” A block of 50,000 Shares is called a Basket. The Trust issues Shares in Baskets on a continuous basis to certain authorized participants (Authorized Participants) as described in “Plan of Distribution.” Each Basket, when created, is offered and sold to an Authorized Participant at a price in Japanese Yen equal to the net asset value (NAV) for 50,000 Shares on the day that the order to create the Basket is accepted by the Trustee.

It is expected that the Shares will be offered and sold to the public by Authorized Participants at varying prices in U.S. Dollars (USD) to be determined by reference to, among other things, the market price of Japanese Yen and the trading price of the Shares on the New York Stock Exchange (NYSE) at the time of each sale. Authorized Participants will not receive from the Trust, the Sponsor or any of their affiliates, any fee or other compensation in connection with the sale of Shares. Authorized Participants may receive commissions or fees from investors who purchase Shares through their commission- or fee-based brokerage accounts in amounts between $0.00 and $0.08 per Share.

The Sponsor intends to apply to the NYSE to have the Shares trade on the NYSE under the symbol “FXY.” The Shares may also trade in other markets, but the Sponsor has not sought to have the Shares listed by any other market.

Investing in the Shares involves significant risks. See “ Risk Factors,” starting on page 9.

Neither the Securities and Exchange Commission (SEC) nor any state securities commission has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The Shares are neither interests in nor obligations of the Sponsor, the Trustee, the Depository or the Distributor.

Neither the Shares nor the Trust’s two deposit accounts maintained at the Depository and the Japanese Yen deposited in them are deposits insured against loss by the Federal Deposit Insurance Corporation (FDIC) or any other federal agency of the United States. Deposits may have only limited protection under the Financial Services Compensation Scheme of England.

On                     , 200     the Sponsor deposited 10,000 Japanese Yen into the primary deposit account of the Trust in exchange for one Share and the Trustee recorded the Share as owned by the Sponsor. The Sponsor purchased the Share solely for the purpose of forming the Trust and the Sponsor will redeem the Share for 10,000 Japanese Yen immediately after the SEC declares effective the registration statement. In order to provide liquidity for the Shares at the commencement of trading, the Initial Purchaser, [            ], having been appointed the specialist in the Shares by the NYSE, will deposit 1.5 billion Japanese Yen in the primary deposit account of the Trust and the Trustee will instruct DTC to record, and DTC will record, three Baskets totaling 150,000 Shares (constituting 10,000 Japanese Yen per Share) as owned by the Initial Purchaser.

The Initial Purchaser intends to offer to the public these 150,000 Shares at a per-Share offering price that will vary depending on, among other factors, the price of the Shares on the NYSE at the time of the offer. Shares offered by the Initial Purchaser at different times may have different offering prices. The Initial Purchaser will not receive from the Trust, the Sponsor, the Distributor or any of their affiliates any fee or other compensation in connection with the sale of the Shares.

The date of this prospectus is                     , 200    

This prospectus contains information you should consider when making an investment decision about the Shares. You may rely on the information contained in this prospectus. The Trust and the Sponsor have not authorized any person to provide you with different information and, if anyone provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer to sell the Shares in any jurisdiction where the offer or sale of the Shares is not permitted.

The Shares are not registered for public sale in any jurisdiction other than the United States.

Table of Contents

Prospectus Summary	1
The Offering	3
Summary Financial Condition	8
Risk Factors	9
Glossary of Terms	14
Statement Regarding Forward-Looking Statements	16
Use of Proceeds	17
Overview of the Foreign Exchange Industry	18
The Japanese Yen	20
Investment Attributes of the Trust	21
Description of the Trust	24
The Sponsor	25
The Trustee	26
The Depository	27
The Distributor	27
Description of the Shares	27
Description of the Deposit Account Agreement	28
Creation and Redemption of Shares	30
Description of the Depositary Trust Agreement	35
United States Federal Tax Consequences	43
ERISA and Related Considerations	46
Plan of Distribution	47
Legal Proceedings	48
Legal Matters	48
Experts	49
Where You Can Find More Information	49
Index to Financial Statements	F-1
Form of Report of Independent Registered Public Accounting Firm	F-2
Form of Statement of Financial Condition	F-3
Notes to Financial Statement	F-4

Authorized Participants may be subject to the prospectus delivery requirements when effecting transactions in the Shares. See “Plan of Distribution.”

This prospectus summarizes certain documents and other information in a manner the Sponsor believes to be accurate. The information contained in the sections captioned “Overview of the Foreign Exchange Industry,” “The Japanese Yen” and “Investment Attributes of the Trust” is based on information obtained from sources that the Sponsor believes to be reliable. The accuracy, reliability and completeness of this information is not guaranteed, however, and has not been independently verified. In making an investment decision, you must rely on your own examination of the Trust, the foreign exchange market, the market for Japanese Yen, the terms of the offering and the Shares, including the merits and risks involved.

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Prospectus Summary

This is a summary of the prospectus. You should read the entire prospectus, including “Risk Factors” beginning on page 9, before making an investment decision about the Shares.

TRUST STRUCTURE

The Trust is a grantor trust to be formed under the laws of the State of New York pursuant to the Depositary Trust Agreement. The Trust will hold Japanese Yen and is expected from time to time to issue Baskets in exchange for deposits of Japanese Yen and to distribute Japanese Yen in connection with redemptions of Baskets. The investment objective of the Trust is for the Shares to reflect the price in USD of the Japanese Yen. Earning income for Shareholders is not the objective of the Trust. Whether investors earn income will primarily depend on the relative value of the Japanese Yen and the USD. If the Japanese Yen appreciates relative to the USD and a Shareholder sells Shares, the Shareholder will earn income. If the Japanese Yen depreciates relative to the USD and a Shareholder sells Shares, the Shareholder will incur a loss.

The Sponsor believes that, for many investors, the Shares represent a cost-effective investment in Japanese Yen. The material terms of the Depositary Trust Agreement are discussed in greater detail in “Description of the Depositary Trust Agreement.” The Shares represent units of fractional undivided beneficial interest in, and ownership of, the Trust. The Sponsor intends to apply to the NYSE to have the Shares trade on the NYSE under the symbol “FXY.” The Shares may also trade in other markets, but the Sponsor has not sought to have the Shares listed by any other market.

The Sponsor, Rydex Specialized Products LLC d/b/a “Rydex Investments”, a Delaware limited liability company, is responsible for establishing the Trust and for registering the Shares. The Sponsor generally oversees the performance of the Trustee and the Trust’s principal service providers, but does not exercise day-to-day oversight over the Trustee or the Trust’s service providers. The Sponsor may remove the Trustee if any of various events occur. See “Description of the Depositary Trust Agreement — The Trustee — Resignation, discharge or removal of trustee; successor Trustees” for more information.

The Sponsor maintains a public website on behalf of the Trust, containing information about the Trust and the Shares. The internet address of the Trust’s website is www.currencyshares.com. This internet address is provided here only as a convenience to you; the information contained on or connected to the Trust’s website is not considered part of this prospectus. The general role and responsibilities of the Sponsor are discussed further under “The Sponsor.”

The Trustee is The Bank of New York, a banking corporation formed under the laws of the State of New York with trust powers. The Trustee is generally responsible for the day-to-day administration of the Trust. This includes calculating the NAV of the Trust and the NAV per Share each business day, paying the Trust’s expenses (which are accrued daily but paid monthly), including withdrawing the Trust’s Japanese Yen, if needed, receiving and processing orders from Authorized Participants to create and redeem Baskets and coordinating the processing of such orders with the Depository and DTC. The general role, responsibilities and regulation of the Trustee are further described under “The Trustee.”

The Depository is JPMorgan Chase Bank, N.A., London Branch. The Depository and the Trustee have elected the laws of England to govern the Deposit Account Agreement between them. The Depository accepts Japanese Yen deposited with it by Authorized Participants in connection with the creation of Baskets. The Depository facilitates the transfer of Japanese Yen into and out of the Trust through the two deposit accounts maintained with it by the Trust. The Depository will pay interest on the primary deposit account but not on the secondary deposit account. Interest on the primary deposit account accrues daily at an initial annual nominal rate of the Bank of Japan Overnight Call Rate minus 27 basis points, and is paid monthly. The general role, responsibilities and regulation of the Depository and the two deposit accounts are further described under “The Depository” and “Description of the Deposit Account Agreement.”

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Detailed descriptions of certain specific rights and duties of the Trustee and the Depository are set forth under “Description of the Shares and the Depositary Trust Agreement” and “Description of the Deposit Account Agreement.”

The Distributor, Rydex Distributors, Inc., is a corporation formed under the laws of the State of Maryland. The Distributor is assisting the Sponsor in marketing the Shares. Specifically, the Distributor will develop a marketing plan for the Trust, prepare marketing materials regarding the Shares, including the content of the Trust’s website, execute the marketing plan for the Trust and provide strategic and tactical research on the foreign exchange markets, in each case in compliance with applicable laws and regulations. The Distributor and the Sponsor are affiliates of one another. There is no written agreement between them, and no compensation is paid by the Sponsor to the Distributor in connection with services performed by the Distributor for the Trust. See “The Distributor” for more information.

TRUST OVERVIEW

The investment objective of the Trust is for the Shares to reflect the price in USD of the Japanese Yen. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding Japanese Yen. The Shares are an investment that is:

Easily Accessible.    Investors will be able to access the market for Japanese Yen through a traditional brokerage account. When admitted to trading, the Shares will be bought and sold on the NYSE like any other exchange-listed security, except that they will regularly be traded until 4:15 PM (New York time) instead of 4:00 PM (New York time).

Cost-Effective.    Investors and businesses wishing to buy or sell currencies in modest size have had to pay as much as a 3% commission to effectuate their transactions. Because Shares will be traded as securities, transaction costs will be substantially reduced.

Exchange-Traded.    Because they will be traded on the NYSE, the Shares will provide investors with an efficient means of implementing investment tactics and strategies that involve Japanese Yen. NYSE-listed securities are eligible for margin accounts. Accordingly, investors will be able to purchase and hold Shares with borrowed money to the extent permitted by law.

Transparent.    The Shares will be backed by the assets of the Trust, which will not hold or use derivative products. The value of the holdings of the Trust will be reported on the Trust’s website, www.currencyshares.com, every business day.

Investing in the Shares will not insulate the investor from price volatility or other risks. See “Risk Factors.”

PRINCIPAL OFFICES

The principal offices of the Sponsor, the Trust and the Distributor are the offices of Rydex Investments at 9601 Blackwell Road, Suite 500, Rockville, Maryland 20850. The telephone number of Rydex Investments at that address is (800) 820-0888. Neither the Sponsor, the Trust nor the Distributor own or lease any other real estate. The Trustee has a trust office at 2 Hanson Place, Brooklyn, New York 11217. The Depository is located at 125 London Wall, London, EC2Y 5AJ, United Kingdom.

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The Offering

Offering The Shares represent units of fractional undivided beneficial interest in, and ownership of, the Trust.

Use of proceeds The proceeds received by the Trust from the issuance and sale of Baskets are Japanese Yen. In accordance with the Depositary Trust Agreement, during the life of the Trust these proceeds will only be (1) owned by the Trust and held by the Depository, (2) disbursed or sold as needed to pay the Trust’s expenses and (3) distributed to Authorized Participants upon the redemption of Baskets.

Proposed NYSE symbol FXY

CUSIP

Creation and redemption The Trust will create and redeem the Shares on a continuous basis, but only in Baskets. A Basket is a block of 50,000 Shares. The creation and redemption of Baskets requires the delivery to the Trust or the distribution by the Trust of the amount of Japanese Yen represented by the Baskets being created or redeemed, the amount of which is based on the combined NAV per Share of the number of Shares included in the Baskets being created or redeemed. Three Baskets, representing 150,000 Shares or 1.5 billion Japanese Yen, is the minimum amount that must be issued and sold by the Trust for this offering to be consummated and for the Shares to commence trading on the NYSE. The amount of Japanese Yen required to create a Basket or to be delivered upon the redemption of a Basket may gradually decrease over time if the Trust’s Japanese Yen are withdrawn to pay the Trust’s expenses. See “Investment Attributes of the Trust — Pro Forma Impact of Trust Expenses.” Baskets may be created or redeemed only by Authorized Participants. Authorized Participants pay a transaction fee for each order to create or redeem Baskets and may sell to other investors the Shares included in the Baskets that they create. See “Creation and Redemption of Shares” for more details.

Interest on deposits JPMorgan Chase Bank, N.A., London Branch will maintain two Japanese Yen-denominated, demand deposit accounts for the Trust: a primary deposit account which will earn interest and a secondary deposit account which will not earn interest. The secondary deposit account will only be used in connection with mid-month creations and redemptions of Baskets, to account for interest that has been earned on the primary deposit account during the month but not yet paid, and to receive interest earned on the primary deposit account, pay Trust expenses and distribute any excess interest to Shareholders on a monthly basis. Interest on the primary deposit account accrues daily at an initial annual

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nominal rate of the Bank of Japan Overnight Call Rate minus 27 basis points, and is paid monthly. The Depository may change this rate in the future based upon changes in the Bank of Japan Overnight Call Rate, other market conditions or the Depository’s liquidity needs. The Bank of Japan Overnight Call Rate is an effective overnight reference rate for the Japanese Yen deposits and is the benchmark for the competitive interest rate to be paid to the Shareholders of the Trust. If the Sponsor believes that the interest rate paid by the Depository is not competitive, the Sponsor’s recourse will be to remove the Depository by terminating the Deposit Account Agreement and closing the accounts. See “Description of the Deposit Account Agreement.” Neither the Trustee nor the Sponsor has the power or authority to deposit the Trust’s Japanese Yen with any other person, entity or account. Interest earned on the deposited Japanese Yen will be used to pay the Trust’s expenses. Any excess interest will be distributed to Shareholders monthly. Such interest is not expected to form a significant part of the Shareholders’ investment return. If the Trust’s expenses exceed interest earned, the Trustee will withdraw Japanese Yen held by the Trust to pay the excess, thereby reducing the number of Japanese Yen per Share. Each sale of Japanese Yen by the Trust will be a taxable event to Shareholders. See “United States Federal Tax Consequences — Taxation of US Shareholders.”

Neither the Shares nor the Deposit Accounts and the Japanese Yen deposited in them are deposits insured against loss by the FDIC or any other federal agency of the United States. Deposits may have only limited protection under the Financial Services Compensation Scheme of England.

Net Asset Value The NAV of the Trust is the aggregate value, expressed in U.S. Dollars, of the Trust’s assets less its liabilities (which include estimated accrued but unpaid fees and expenses). The Trustee will calculate, and the Sponsor will publish, the Trust’s net asset value (NAV) each business day. To calculate the NAV, the Trustee will add to the amount of Japanese Yen in the Trust at the end of the preceding business day accrued but unpaid interest, Japanese Yen receivable under pending purchase orders and the value of other Trust assets, and will subtract the accrued but unpaid Sponsor’s fee, Japanese Yen payable under pending redemption orders and other Trust expenses and liabilities, if any. The NAV will be expressed in USD based on the Noon Buying Rate as determined by the Federal Reserve Bank of New York. If, on a particular evaluation day, the Noon Buying Rate has not been determined and announced by 2:00 PM (New York time), then the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate shall be used to determine the NAV of the

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Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for such valuation. In the event that the Trustee and the Sponsor determine that the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate is not an appropriate basis for valuation of the Trust’s Japanese Yen, they shall determine an alternative basis for such evaluation to be employed by the Trustee. Such an alternative basis may include reference to other exchange traded securities that reflect the value of the Japanese Yen relative to the USD. The use of any alternative basis to determine NAV would be disclosed on the Trust’s website. The Trustee also determines the NAV per Share, which equals the NAV of the Trust divided by the number of outstanding Shares. The Sponsor will publish the NAV and NAV per Share on each day that the NYSE is open for regular trading on the Trust’s website, www.currencyshares.com.

Trust expenses The Trust’s only ordinary recurring expense is expected to be the Sponsor’s fee. The Sponsor is obligated under the Depositary Trust Agreement to assume and pay the following administrative and marketing expenses of the Trust: the Trustee’s monthly fee, typical maintenance and transaction fees of the Depository, NYSE listing fees, printing and mailing costs, audit fees and expenses, up to $100,000 per annum in legal fees and expenses, and applicable license fees. The Sponsor will also pay the costs of the Trust’s organization and the cost of the initial sale of the Shares, including the applicable SEC registration fees. The Trust may incur additional expenses in certain other circumstances. These additional expenses include expenses not assumed by the Sponsor, taxes and governmental charges, expenses and costs of any extraordinary services performed by the Trustee or the Sponsor on behalf of the Trust or action taken by the Trustee or the Sponsor to protect the Trust or the interests of Shareholders, indemnification of the Sponsor under the Depositary Trust Agreement and legal fees and expenses in excess of $100,000 per year. If these additional expenses are incurred, the Trust will be required to pay these expenses by withdrawing deposited Japanese Yen and the amount of Japanese Yen represented by a Share will decline at such time. Accordingly, the Shareholders will effectively bear the cost of these other expenses, if incurred. Although the Trust cannot definitively state the frequency or magnitude of such expenses, the Trust predicts that they will occur infrequently, if at all. See “Description of the Depositary Trust Agreement — Expenses of the Trust.”

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The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Japanese Yen in the Trust (including all unpaid interest but excluding unpaid fees, each as accrued through the immediately preceding day) and is paid monthly. To pay the Sponsor’s fee and any other Trust expenses that have been incurred each month, the Trustee will first withdraw Japanese Yen the Trust has earned as interest. If that is not sufficient to pay the Trust’s expenses, then the Trustee will withdraw deposited Japanese Yen as needed. See “Investment Attributes of the Trust — Trust Expenses” and “Description of the Depositary Trust Agreement — Expenses of the Trust.” The payment of expenses in Japanese Yen and the conversion of Japanese Yen to USD, if required to pay expenses of the Trust, are generally taxable events to U.S. Shareholders. See “United States Federal Tax Consequences — Taxation of U.S. Shareholders.” The Trust and the Sponsor do not anticipate any non-ordinary recurring expenses that will be paid from the Trust.

Termination events The Trustee will terminate the Trust if any of the following events occur:

• the Sponsor has given notice of resignation or is unable to perform its duties or becomes bankrupt or insolvent and the Trustee does not appoint a successor sponsor or agree to act as sponsor;

• Shareholders holding at least 75% of the outstanding Shares notify the Trustee that they elect to terminate the Trust;

• the Depository resigns or is removed; or

• the Trustee receives notice from the IRS or from counsel for the Trust or the Sponsor that the Trust fails to qualify for treatment, or will not be treated, as a grantor trust under the Internal Revenue Code of 1986, as amended (Internal Revenue Code).

The Sponsor may, in its sole discretion, direct the Trustee to terminate the Trust if any of the following events occur:

• the Shares are de-listed from the NYSE and are not listed for trading on another U.S. national securities exchange or through the NASDAQ Stock Market within five business days from the date the Shares are de-listed;

• the SEC determines that the Trust is an investment company under the Investment Company Act of 1940, as amended;

• the NAV of the Trust remains less than $100 million for 30 consecutive business days at any time after the first 90 days of the Shares being eligible for trading on the NYSE;

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• all of the Trust’s assets are sold;

• the aggregate market capitalization of the Trust, based on the closing price for the Shares, remains less than $300 million for five consecutive trading days beginning after the first anniversary of the Trust’s inception; or

• DTC stops providing book-entry settlement services for the Shares.

If the Trustee notifies the Sponsor of the Trustee’s election to resign and the Sponsor does not appoint a successor trustee within 60 days, the Trustee may terminate the Trust.

The Trust will terminate on [                ], 204     if it has not been terminated prior to that date.

Upon termination of the Trust and surrender of Shares by the Shareholders, Shareholders will receive the amount of Japanese Yen represented by their Shares. If, however, a Shareholder surrenders its Shares ninety days or more after the termination of the Trust, it will receive a distribution in USD after the Trustee has sold the Trust’s Japanese Yen and has paid or made provision for the Trust’s liabilities. See “Description of the Trust Agreement — Termination of the Trust.”

Authorized Participants An Authorized Participant is a DTC Participant that is a registered broker-dealer or other securities market participant such as a bank or other financial institution that is not required to register as a broker-dealer to engage in securities transactions and has entered into a Participant Agreement with the Trustee. Only Authorized Participants may place orders to create or redeem Baskets. The Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery of Japanese Yen required for creation or redemption. A list of the current Authorized Participants can be obtained from the Trustee or the Sponsor. See “Creation and Redemption of Shares” for more details.

Shareholders Trading via the NYSE A Shareholder who buys or sells Shares from, to, or through a broker-dealer should expect to be charged a commission by the broker-dealer for effecting the transaction. Investors are encouraged to review the terms of their brokerage accounts for details on applicable commissions or charges.

Clearance and settlement The Sponsor and the Trustee will apply to DTC for acceptance of the Shares in its book-entry settlement system. If the Shares are eligible for book-entry settlement, all Shares will be evidenced by one or more global certificates that the Trustee will issue to DTC. The Shares will be available only in book-entry form. Shareholders may hold their Shares through DTC, if they are DTC Participants, or through Authorized Participants or Indirect Participants.

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Summary Financial Condition

As of [                    ], 200    , the date of formation of the Trust and the date the Sponsor deposited 10,000 Japanese Yen in the Trust’s primary deposit account with the Depository, the NAV of the Trust, which represents the value of the Japanese Yen deposited into the Trust in exchange for the initial Share, was $[            ] and the NAV per Share was $[            ]. See “Statement of Financial Condition” on page F-3.

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Risk Factors

You should consider carefully the risks described below before making an investment decision. You should also refer to the other information included in this prospectus, including the Trust’s financial statements and the related notes.

The value of the Shares relates directly to the value of the Japanese Yen held by the Trust. Fluctuations in the price of the Japanese Yen could materially and adversely affect the value of the Shares.

The Shares are designed to reflect the price of the Japanese Yen, plus accumulated interest, less the Trust’s expenses. The price of the Japanese Yen has fluctuated widely over the past several years. Several factors may affect the price of the Japanese Yen, including:

• Debt level and trade deficit of Japan;

• Inflation rates of the United States and Japan and investors’ expectations concerning inflation rates;

• Interest rates of the United States and Japan and investors’ expectations concerning interest rates;

• Investment and trading activities of mutual funds, hedge funds and currency funds; and

• Global or regional political, economic or financial events and situations.

In addition, the Japanese Yen may not maintain its long-term value in terms of purchasing power in the future. When the price of the Japanese Yen declines, the Sponsor expects the price of a Share to decline as well.

The Japanese Yen/USD exchange rate, like foreign exchange rates in general, can be volatile and difficult to predict. This volatility could materially and adversely affect the performance of the Shares.

Foreign exchange rates are influenced by the factors identified immediately above and may also be influenced by: changing supply and demand for a particular currency; monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment by residents of a country in other countries); changes in balances of payments and trade; trade restrictions; and currency devaluations and revaluations. Also, governments from time to time intervene in the currency markets, directly and by regulation, in order to influence prices directly. These events and actions are unpredictable. The resulting volatility in the Japanese Yen/USD exchange rate could materially and adversely affect the performance of the Shares.

If interest earned by the Trust does not exceed expenses, the Trustee will withdraw Japanese Yen from the Trust to pay these excess expenses which will reduce the amount of Japanese Yen represented by each Share on an ongoing basis and may result in adverse tax consequences.

Each outstanding Share will represent a fractional, undivided interest in the Japanese Yen held by the Trust. Although the Trust will generate interest, it is possible that the amount of interest earned may not exceed expenses, in which case the Trustee will withdraw Japanese Yen from the Trust to pay these excess expenses. As a result, the amount of Japanese Yen represented by each Share may gradually decline over time. This is true even if additional Shares are issued in exchange for additional deposits of Japanese Yen into the Trust, as the amount of Japanese Yen required to create Shares will proportionately reflect the amount of Japanese Yen represented by the Shares outstanding at the time of creation. Assuming a constant Japanese Yen price, if expenses exceed interest earned, the trading price of the Shares will gradually decline relative to the price of Japanese Yen as the amount of Japanese Yen represented by the Shares gradually declines. In this event, the Shares will only maintain their original price if the price of Japanese Yen increases.

Investors should be aware that a gradual decline in the amount of Japanese Yen represented by the Shares may occur regardless of whether the trading price of the Shares rises or falls in response to changes in the price of Japanese Yen. The estimated ordinary operating expenses of the Trust, which accrue daily commencing after the first day of trading of the Shares on the NYSE, are described in “Investment Attributes of the Trust — Pro Forma Impact of Trust Expenses.”

The payment of expenses by the Trust will result in a taxable event to Shareholders. To the extent Trust expenses exceed interest paid to the Trust, a gain or loss may be recognized by Shareholders depending

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on the tax basis of the tendered Japanese Yen. See “United States Federal Tax Consequences—Taxation of U.S. Shareholders” for more information.

If the Trust incurs expenses in USD, the Trust would be required to sell Japanese Yen to pay these expenses. The sale of the Trust’s Japanese Yen to pay expenses in USD at a time of low Japanese Yen prices could adversely affect the value of the Shares.

The Trustee will sell Japanese Yen held by the Trust if necessary to pay Trust expenses if any incurred in USD, irrespective of then-current Japanese Yen prices. The Trust is not actively managed and no attempt will be made to buy or sell Japanese Yen to protect against or to take advantage of fluctuations in the price of Japanese Yen. Consequently, the Trust’s Japanese Yen may be sold at a time when the Japanese Yen price is low, resulting in a negative effect on the value of the Shares.

Purchasing activity in the Japanese Yen market associated with the purchase of Baskets from the Trust may cause a temporary increase in the price of Japanese Yen. This increase may adversely affect an investment in the Shares.

Purchasing activity associated with acquiring the Japanese Yen required for deposit into the Trust in connection with the creation of Baskets may temporarily increase the market price of Japanese Yen, which will result in higher prices for the Shares. Temporary increases in the market price of Japanese Yen may also occur as a result of the purchasing activity of other market participants. Other market participants may attempt to benefit from an increase in the market price of Japanese Yen that may result from increased purchasing activity of Japanese Yen connected with the issuance of Baskets. Consequently, the market price of Japanese Yen may decline immediately after Baskets are created. If the price of Japanese Yen declines, then it is anticipated that the trading price of the Shares will also decline. In addition, if the Trust experiences a significant increase in its expenses due to an unexpected event, then it is anticipated that the unexpected expenses would reduce the NAV of the Trust, which would cause the trading price of the Shares to decline even if the price of Japanese Yen did not decline.

The Deposit Accounts are not entitled to payment at any office of JPMorgan Chase Bank, N.A. located in the United States.

The federal laws of the United States prohibit banks located in the United States from paying interest on unrestricted demand deposit accounts. Therefore, payments out of the Deposit Accounts will be payable only at the London branch of JPMorgan Chase Bank, N.A., located in England. The Trustee will not be entitled to demand payment of these accounts at any office of JPMorgan Chase Bank, N.A. that is located in the United States. JPMorgan Chase Bank, N.A. will not be required to repay the deposit if its London branch cannot repay the deposit due to an act of war, insurrection or civil strife or an action by a foreign government or instrumentality (whether de jure or de facto) in England.

Shareholders will not have the protections associated with ownership of a demand deposit account insured in the United States by the Federal Deposit Insurance Corporation nor the full protection provided for bank deposits under English law.

Neither the Shares nor the Deposit Accounts and the Japanese Yen deposited in them are a deposit insured against loss by the FDIC or any other federal agency. Deposits may have only limited protection under the Financial Services Compensation Scheme of England.

Japanese Yen deposited in the Deposit Accounts by an Authorized Participant will be commingled with Japanese Yen deposited by other Authorized Participants and will be held by the Depository in either the primary deposit account or the secondary deposit account of the Trust. Japanese Yen held in the Deposit Accounts will not be segregated from the Depository’s other assets. If the Depository becomes insolvent, then its assets might not be adequate to satisfy a claim by the Trust or any Authorized Participant. In addition, in the event of the insolvency of the Depository or the U.S. bank of which it is a branch, there may be a delay and costs incurred in recovering the Japanese Yen held in the Deposit Accounts.

The Trust will have no proprietary rights in or to any specific Japanese Yen held by the Depository and will be an unsecured creditor of the Depository with respect to the Japanese Yen held in the Deposit Accounts in the event of the insolvency of the Depository or the U.S. bank of which it is a branch. In the

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event the Depository or the U.S. bank of which it is a branch becomes insolvent, the Depository’s assets might not be adequate to satisfy a claim by the Trust or any Authorized Participant for the amount of Japanese Yen deposited by the Trust or the Authorized Participant, in such event, the Trust and any Authorized Participant will generally have no right in or to assets other than those of the Depository.

In the case of insolvency of the Depository or JPMorgan Chase Bank, N.A., the U.S. bank of which the Depository is a branch, a liquidator may seek to freeze access to the Japanese Yen held in all accounts by the Depository, including the Deposit Accounts. The Trust and the Authorized Participants could incur expenses and delays in connection with asserting their claims. These problems would be exacerbated by the reality that the Deposit Accounts will not be held in the U.S. but instead will be held at the London branch of a U.S. national bank, where it will be subject to English insolvency law. Further, under U.S. law, in the case of the insolvency of JPMorgan Chase Bank, N.A., the claims of creditors in respect of accounts (such as the Trust’s Deposit Accounts) that are maintained with an overseas branch of JPMorgan Chase Bank, N.A. will be subordinate to claims of creditors in respect of accounts maintained with JPMorgan Chase Bank, N.A. in the U.S., greatly increasing the risk that the Trust and the Trust’s beneficiaries would suffer a loss.

The Shares are a new securities product. Their value could decrease if unanticipated operational or trading problems were to arise.

The mechanisms and procedures governing the creation, redemption and offering of the Shares have been developed specifically for this offering. Unanticipated issues might arise with respect to the mechanics of Trust operations and the trading of the Shares. These issues could have a material, adverse effect on the value of an investment in the Shares. In addition, to the extent that unanticipated operational or trading problems or issues arise, the Sponsor’s past experience and qualifications might not be suitable for solving the problems.

Shareholders will not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940.

The Investment Company Act is designed to protect investors by preventing: insiders from managing investment companies to their benefit and to the detriment of public investors; the issuance of securities having inequitable or discriminatory provisions; the management of investment companies by irresponsible persons; the use of unsound or misleading methods of computing earnings and asset value; changes in the character of investment companies without the consent of investors; and investment companies from engaging in excessive leveraging. To accomplish these ends, the Investment Company Act requires the safekeeping and proper valuation of fund assets, restricts greatly transactions with affiliates, limits leveraging, and imposes governance requirements as a check on fund management. The Investment Company Act applies to a range of investment company structures, but, in practice, primarily regulates a company holding a portfolio of investment securities such as publicly traded stocks, bonds and money market instruments: selected by an affiliated investment adviser pursuant to the company’s stated investment objectives, policies, restrictions, strategies and techniques where the investment adviser manages the portfolio and otherwise operates the company on a day-to-day basis for a management fee and other charges and expenses and, in doing so, has conflicts of interest with the company; valued, priced for sale and redemption, physically held and traded in securities markets pursuant to computational, custody and brokerage and other transactional requirements peculiar to such a portfolio of investment securities; and overseen by the company’s board of directors that is elected, constituted and governed pursuant to specified standards developed in the context of such a portfolio of investment securities.

The Trust is not registered as an investment company under the Investment Company Act and is not required to register under that Act. Consequently, Shareholders will not have the regulatory protections afforded to investors in registered investment companies.

Shareholders will not have the rights enjoyed by investors in certain other financial instruments.

As interests in a grantor trust, the Shares will have none of the statutory rights normally associated with the ownership of shares of a business corporation, including, for example, the right to bring “oppression”

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or “derivative” actions. Apart from the rights afforded to them by federal and state securities laws, Shareholders have only those rights relative to the Trust, the Trust property and the Shares that are set forth in the Depositary Trust Agreement. In this connection, the Shareholders have limited voting and distribution rights. They do not have the right to elect directors. See “Description of the Shares” for a description of the limited rights of the Shareholders.

The Shares may trade at a price which is at, above, or below the NAV per Share.

The NAV per Share fluctuates with changes in the market value of the Trust’s assets. The market price of Shares can be expected to fluctuate in accordance with changes in the NAV per Share, but also in response to market supply and demand. As a result, the Shares might trade at prices at, above or below the NAV per Share.

The interest rate earned by the Trust, although competitive, may not be the best rate available. If the Sponsor determines that the interest rate is inadequate, then its sole recourse will be to remove the Depository and terminate the Deposit Accounts.

The Depository is committed to endeavor to pay a competitive interest rate on the balance of Japanese Yen in the primary deposit account of the Trust. Interest on the primary deposit account accrues daily at an initial annual nominal rate of the Bank of Japan Overnight Call Rate minus 27 basis points, and is paid monthly. The Depository may change the rate based upon changes in the Bank of Japan Overnight Call Rate, other market conditions or the Depository’s liquidity needs. If the Sponsor believes that the interest rate paid by the Depository is not adequate, the Sponsor’s sole recourse will be to remove the Depository and terminate the Deposit Accounts. The Depository will not be paid a fee for its services to the Trust; rather, it will generate income or loss based on its ability to earn a “spread” or “margin” over the interest it pays to the Trust by using the Trust’s Japanese Yen to make loans or in other banking operations. For these reasons, you should not expect that the Trust will be paid the best available interest rate at any time or over time.

The Depository owes no fiduciary duties to the Trust or the Shareholders, is not required to act in their best interest and could resign or be removed by the Sponsor, which would trigger early termination of the Trust.

The Depository is not a trustee for the Trust or the Shareholders. As stated above, the Depository is not obligated to maximize the interest rate paid to the Trust. In addition, the Depository has no duty to continue to act as the depository of the Trust. The Depository could terminate its role as depository for any reason whatsoever upon 90 days’ notice to the Trust. Such a termination might result, for example, if the Sponsor determines that the interest rate paid by the Depository is inadequate. In the event that the Depository were to resign or be removed, the Trust will be terminated.

Shareholders may incur significant fees upon the termination of the Trust.

The occurrence of any one of several events would either require the Trust to terminate or permit the Sponsor to terminate the Trust. For example, if the Depository were to resign or be removed, then the Sponsor would be required to terminate the Trust. Shareholders tendering their Shares within 90 days of the Trust’s termination will receive the amount of Japanese Yen represented by their Shares. Shareholders may incur significant fees if they choose to convert the Japanese Yen they receive to U.S. Dollars. See “Description of the Depositary Trust Agreement — Termination of the Trust” for more information about the termination of the Trust, including when the termination of the Trust may be triggered by events outside the direct control of the Sponsor, the Trustee or the Shareholders.

Redemption orders are subject to rejection by the Trustee under certain circumstances.

The Trustee will reject a redemption order if the order is not in proper form as described in the Participant Agreement or if the fulfillment of the order, in the opinion of its counsel, might be unlawful. Any such rejection could adversely affect a redeeming Shareholder. For example, the resulting delay would adversely affect the value of the Shareholder’s redemption distribution if the NAV were to decline during the delay. See “Creation and Redemption of Shares — Redemption Procedures — Suspension or rejection of redemption orders.” In the Depositary Trust Agreement, the Sponsor and the Trustee disclaim any liability for any loss or damage that may result from any such rejection.

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Substantial sales of Japanese Yen by the official sector could adversely affect an investment in the Shares.

The official sector consists of central banks, other governmental agencies and multi-lateral institutions that buy, sell and hold Japanese Yen as part of their reserve assets. The official sector holds a significant amount of Japanese Yen that can be mobilized in the open market. In the event that future economic, political or social conditions or pressures require members of the official sector to sell their Japanese Yen simultaneously or in an uncoordinated manner, the demand for Japanese Yen might not be sufficient to accommodate the sudden increase in the supply of Japanese Yen to the market. Consequently, the price of the Japanese Yen could decline, which would adversely affect an investment in the Shares.

Shareholders that are not Authorized Participants may only purchase or sell their Shares in secondary trading markets.

Only Authorized Participants may create or redeem Baskets of Shares through the Trust. All other investors that desire to purchase or sell Shares must do so through the NYSE or in other markets, if any, in which the Shares may be traded.

The liability of the Sponsor and the Trustee under the Depositary Trust Agreement is limited; and, except as set forth in the Depositary Trust Agreement, they are not obligated to prosecute any action, suit or other proceeding in respect of any Trust property.

The Trust Agreement provides that neither the Sponsor nor the Trustee assumes any obligation or is subject to any liability under the Trust Agreement to any Shareholder, except that they each agree to perform their respective obligations specifically set forth in the Depositary Trust Agreement without negligence or bad faith. Additionally, neither the Sponsor nor the Trustee is obligated to, although each may in its respective discretion, prosecute any action, suit or other proceeding in respect of any Trust property. The Depositary Trust Agreement does not confer upon Shareholders the right to prosecute any such action, suit or other proceeding.

The Depositary Trust Agreement may be amended to the detriment of Shareholders without their consent.

The Sponsor and the Trustee may amend most provisions (other than those addressing core economic rights) of the Depositary Trust Agreement without the consent of any Shareholder. Such an amendment could impose or increase fees or charges borne by the Shareholders. Any amendment that increases fees or charges (other than taxes and other governmental charges, registration fees or other expenses), or that otherwise prejudices any substantial existing rights of Shareholders, will not become effective until 30 days after written notice is given to Shareholders.

The License Agreement with The Bank of New York may be terminated by The Bank of New York in the event of a material breach. Termination of the License Agreement might lead to early termination and liquidation of the Trust.

BNY and an affiliate of the Sponsor have entered into a License Agreement granting the Sponsor’s affiliate a license to certain patent applications made by BNY covering systems and methods for securitizing a commodity. The Sponsor’s affiliate has sublicensed the license to the Sponsor. The license is limited to a non-exclusive grant for the life of BNY’s patents and patent applications. The License Agreement provides that each of the parties may provide notice of intent to terminate the License Agreement in the event the other party commits a material breach. If the License Agreement is terminated and one or more of BNY’s patent applications issue as patents, then BNY may claim that the operation of the Trust violates its patent or patents and seek an injunction forcing the Trust to cease operation and the Shares to cease trading. In that case, the Trust might be forced to terminate and liquidate, which would adversely affect Shareholders.

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Glossary of Terms

In this prospectus, each of the following terms has the meaning assigned to it here:

“Authorized Participant” — A DTC Participant that is a registered broker-dealer or other securities market participant such as a bank or other financial institution that is not required to register as a broker-dealer to engage in securities transactions and that has entered into a Participant Agreement with the Sponsor and the Trustee. Only Authorized Participants may place orders to create or redeem Baskets.

“Bank of Japan Overnight Call Rate” — A rate equal to the Bank of Japan average Overnight Call Rate as published on the Reuters Page TONAT or on the Bank of Japan website at http://www3.boj.or.jp/market/en/menu_m.htm. The Bank of Japan Overnight Call Rate is an effective overnight reference rate for the Japanese Yen deposits and is the benchmark for the competitive interest rate to be paid to the Shareholders of the Trust.

“Basket Japanese Yen Amount” — The deposit required to create one or more Baskets pursuant to a purchase order. This deposit will be an amount of Japanese Yen bearing the same proportion to the number of Baskets to be created as the total assets of the Trust (net of estimated accrued but unpaid expenses) bears to the number of Baskets outstanding on the date that the order to purchase is accepted by the Trustee.

“BNY” — The Bank of New York, a banking corporation organized under the laws of the State of New York with trust powers. BNY is the trustee of the Trust.

“Deposit Accounts” — The primary (interest-bearing) and secondary (non-interest bearing) Japanese Yen-denominated, demand accounts of the Trust established with the Depository by the Deposit Account Agreement. The Deposit Accounts hold the Japanese Yen deposited with the Trust.

“Deposit Account Agreement” — The agreements, including the Account Application and the JPMorgan Chase Bank, N.A. Global Account Terms, between the Trustee and the Depository establishing the Deposit Accounts with the Depository.

“Depositary Trust Agreement” — The agreement between the Trustee and the Sponsor establishing and governing the operations of the Trust.

“DTC” — The Depository Trust Company. DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the U.S. Federal Reserve System and a clearing agency registered with the SEC. DTC acts as the securities depository for the Shares.

“DTC Participant” — Participants in DTC, such as banks, brokers, dealers and trust companies.

“Foreign exchange” — Non-U.S. currency.

“Indirect Participants” — Those banks, brokers, dealers, trust companies and others that maintain, either directly or indirectly, a custodial relationship with a DTC Participant.

“Internal Revenue Code” — The Internal Revenue Code of 1986, as amended.

“Japanese Yen” — The official currency of Japan.

“NAV” — Net asset value. The Trustee will calculate, and the Sponsor will publish, the Trust’s NAV each business day as as soon as practicable after the Federal Reserve Bank of New York announces the Noon Buying Rate. To calculate the NAV, the Trustee will add to the amount of Japanese Yen in the Trust at the end of the preceding day accrued but unpaid interest, Japanese Yen receivable under pending purchase orders and the value of other Trust assets, and will subtract the accrued but unpaid Sponsor’s fee, Japanese Yen payable under pending redemption orders and other Trust expenses and liabilities, if any.

“Noon Buying Rate” — The Japanese Yen/USD exchange rate as determined by the Federal Reserve Bank of New York as of 12:00 PM (New York time). If, on a particular evaluation day, the Federal

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Reserve Bank of New York does not announce a Noon Buying Rate by 2:00 PM (New York time), then the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate will be deemed the “Noon Buying Rate” and be used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for such valuation. In the event that the Trustee and the Sponsor determine that the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate is not an appropriate basis for valuation of the Trust’s Japanese Yen, they shall determine an alternative basis for such evaluation to be employed by the Trustee, which will be deemed the “Noon Buying Rate” and will be disclosed on the Trust’s website.

“OTC” — The global over-the-counter market for transactions in foreign exchange, including spot and forward transactions, swaps and transactions in options and other instruments that derive their value from foreign exchange.

“Participant Agreement” — An agreement entered into by each Authorized Participant with the Sponsor and the Trustee that states the procedures for the creation and redemption of Baskets and for the delivery of Japanese Yen required for creation and redemption.

“Shareholder” — Any owner of a Share (whether such owner owns through through DTC, a DTC Participant or an Indirect Participant).

“SWIFT” — Society for Worldwide Interbank Financial Telecommunication.

“USD” or “$” — United States Dollar or Dollars.

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Statement Regarding Forward-Looking Statements

This prospectus includes “forward-looking statements” which generally relate to future events or future performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology. All statements (other than statements of historical fact) included in this prospectus that address activities, events or developments that will or may occur in the future, including such matters as changes in currency prices and market conditions (for Japanese Yen and the Shares), the Trust’s operations, the Sponsor’s plans and references to the Trust’s future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses the Sponsor made, based on its perceptions of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed in this prospectus, general economic, market and business conditions, changes in laws and regulations, including those concerning taxes, made by governmental authorities and regulatory bodies and other world economic and political developments. See “Risk Factors.” Consequently, all forward-looking statements made in this prospectus are qualified by these cautionary statements, and there can be no assurance that the actual results or developments that the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences to, or have the expected effects on, the Trust’s operations or the value of the Shares. Moreover, neither the Sponsor nor any other person assumes responsibility for the accuracy or completeness of the forward-looking statements. Neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to reflect a change in the Sponsor’s expectations or predictions.

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Use of Proceeds

The proceeds received by the Trust from the issuance and sale of Baskets are Japanese Yen. Such proceeds will be deposited into the Deposit Accounts. In accordance with the Depositary Trust Agreement, during the life of the Trust these proceeds will only be (1) owned by the Trust and held by the Depository, (2) disbursed or sold as needed to pay the Trust’s expenses, and (3) distributed to Authorized Participants upon the redemption of Baskets.

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Overview of the Foreign Exchange Industry

The foreign exchange market is the largest and most liquid financial market in the world. As of April 2004, the foreign exchange market experienced an estimated average daily turnover of approximately $1.88 trillion, which was a 57% increase (at current exchange rates) from the 2001 estimated average daily turnover. The foreign exchange market is predominantly an over-the-counter market, with no fixed location; it operates 24 hours a day, seven days a week. London, New York City and Tokyo are the principal geographic centers of the world-wide foreign exchange market, with approximately 58% of all foreign exchange business executed in the U.K., U.S. and Japan. Other, smaller markets include Singapore, Zurich and Frankfurt.

There are three major kinds of transactions in the traditional foreign exchange markets: spot transactions, outright forwards and foreign exchange swaps. “Spot” trades are foreign exchange transactions that settle typically within two business days with the counterparty to the trade. Spot transactions account for approximately 35% of reported daily volume in the traditional foreign exchange markets. “Forward” trades, which are transactions that settle on a date beyond spot, account for 12% of the reported daily volume, and “swap” transactions, in which two parties exchange two currencies on one or more specified dates over an agreed period and exchange them again when the period ends, account for the remaining 53% of volume. There also are transactions in currency options, which trade both over-the-counter and, in the U.S., on the Philadelphia Stock Exchange. Currency futures are transactions in which an institution buys or sells a standardized amount of foreign currency on an organized exchange for delivery on one of several specified dates. Currency futures are traded in a number of regulated markets, including the International Monetary Market division of the Chicago Mercantile Exchange, the Singapore Exchange Derivatives Trading Limited (formerly the Singapore International Monetary Exchange, or SIMEX) and the London International Financial Futures Exchange (LIFFE). Over 85% of currency derivative products (swaps, options and futures) are traded OTC.

Participants in the foreign exchange market have various reasons for participating. Multinational corporations and importers need foreign currency to acquire materials or goods from abroad. Banks and multinational corporations sometimes require specific wholesale funding for their commercial loan or other foreign investment portfolios. Some participants hedge open currency exposure through off-balance-sheet products.

The primary market participants in foreign exchange are banks (including government-controlled central banks), investment banks, money managers, multinational corporations and institutional investors. The most significant participants are the major international commercial banks that act both as brokers and as dealers. In their dealer role, these banks maintain long or short positions in a currency and seek to profit from changes in exchange rates. In their broker role, the banks handle buy and sell orders from commercial customers, such as multinational corporations. The banks earn commissions when acting as agent. They profit from the spread between the rates at which they buy and sell currency for customers when they act as principal.

Typically, banks engage in transactions ranging from $5 million to $50 million in amount. Although banks will engage in smaller transactions, the fees that they charge have made the foreign currency markets relatively inaccessible to individual investors. Some banks allow individual investors to engage in spot trades without paying traditional commissions on the trades. Such trading is often not profitable for individual investors, however, because the banks charge the investor the spread between the bid and the ask price maintained by the bank on all purchases and sales. The overall effect of this fee structure depends on the spread maintained by the bank and the frequency with which the investor trades. Generally this fee structure is particularly disadvantageous to active traders.

The Sponsor believes that the Trust is the first exchange-traded product whose assets are limited to the Japanese Yen and among the first exchange-traded products limited solely to a particular foreign currency. The first exchange-traded product limited solely to a particular foreign currency is the CurrencyShares^SM Euro Currency Trust (NYSE: FXE), also sponsored by Rydex Investments. Rydex also sponsors six additional exchange-traded products limited solely to foreign currency, as follows: CurrencyShares Australian Dollar Trust (NYSE: FXA); CurrencyShares British Pound Sterling Trust (NYSE: FXB);

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CurrencyShares Canadian Dollar Trust (NYSE: FXC); CurrencyShares Mexican Peso Trust (NYSE: FXM); CurrencyShares Swedish Krona Trust (NYSE: FXS); and CurrencyShares Swiss Franc Trust (NYSE: FXF)

The Trust will not hold or trade in any currency swaps, options, futures or other currency derivative products, or engage in any foreign exchange market transactions. The sole assets of the Trust are the Japanese Yen deposited into the Deposit Accounts upon the creation of Baskets and the Japanese Yen earned as interest on the primary deposit account. The investment objective of the Trust is for the Shares to reflect the price in USD of the Japanese Yen. The Sponsor believes that, for many investors, the Shares represent a cost-effective investment relative to traditional means of investing in the foreign exchange market. Because the Shares will be traded on the NYSE, investors will be able to access the market for Japanese Yen through a traditional brokerage account which will provide investors with an efficient means of implementing investment tactics and strategies that involve Japanese Yen.

Much of the foregoing information is taken from the “Triennial Central Bank Survey” published by the Bank for International Settlements in March 2005 (the “BIS Survey”), A Foreign Exchange Primer by Shani Shamah (John Wiley & Sons Ltd., 2003) and Trading in the Global Currency Markets by Cornelius Luca (New York Institute of Finance, 2d ed., 2000).

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The Japanese Yen

Japan’s industrialized free market economy is now the world’s second largest, ranking only behind the United States. It has developed a highly diversified manufacturing and service economy and is one of the world’s largest producers of motor vehicles, steel and high-technology manufactured goods, making it a major international trading power. Japan is the United States’ fourth-largest trading partner and its best market for aircraft, software and agricultural products. Tokyo, the capital of Japan, ranks with New York as a leading international trading partner. The Tokyo Exchange is one of the largest stock exchanges in the world.

The Japanese Yen has been the official currency of Japan since 1871. The Bank of Japan has been operating as the central bank of Japan since 1882.

The average daily turnover in the foreign exchange markets is approximately $1.9 trillion. The USD was on one side of 89% of all currency transactions, followed by the euro (37%) and the Japanese Yen (20%). The USD/Japanese Yen pair has an average daily turnover of approximately $296 billion, which makes it the second most traded currency pair, accounting for approximately 17% of global foreign exchange transactions.

The value of the Japanese Yen in relation to the USD has risen significantly since 1985 when the G5 nations (France, West Germany, Japan, the United States and the United Kingdom) agreed to devalue the USD in relation to the Japanese Yen and the German Deutsche Mark by intervening in the currency markets. During the next two years the USD declined 51% versus the Japanese Yen. As a result, the price of Japanese export goods increased, reducing Japan’s competitiveness in overseas markets. During this time, speculative corporate investments in real estate and the stock markets caused both to rise to unsustainable levels. In 1989 the Bank of Japan tightened its monetary policies to slow the rise in prices in real estate and the stock markets. The tightening sent the Tokyo stock market into a spiral, driving the so-called “ bubble economy” into recession.

In 1990 the Japanese Yen began to stabilize relative to the USD but the recession continued into the late nineties. Currently, Japan’s economy is in its longest expansion since 1970. Real gross domestic product grew approximately 4% in the 1980s, compared to 1% in the 1990s. Real growth in 2005 was 2.7%.

From the beginning of 2002 to the end of 2005, the Noon Buying Rate for the Japanese Yen as reported by the Federal Reserve Bank of New York ranged from 102.50 on January 14, 2005 to 134.71 on February 8, 2002. As of January 3, 2007, the Noon Buying Rate for the Japanese Yen was 119.58.

The foregoing information was taken from the BIS Survey and information promulgated by the US State Department, the US Census Bureau, the US Central Intelligence Agency, the Tokyo Stock Exchange, the Bank of Japan, the Embassy of Japan in Singapore, Bloomberg and the Federal Reserve Bank of New York.

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Investment Attributes of the Trust

The investment objective of the Trust is for the Shares to reflect the price in USD of the Japanese Yen. The Sponsor believes that, for many investors, the Shares represent a cost-effective investment relative to traditional means of investing in the foreign exchange market. As the value of the Shares is tied to the value of the Japanese Yen held by the Trust, it is important in understanding the investment attributes of the Shares to first understand the investment attributes of the Japanese Yen.

REASONS FOR INVESTING IN JAPANESE YEN

All forms of investment carry some degree of risk. Although the Shares have certain unique risks described in “Risk Factors,” generally these are the same risks as investing directly in Japanese Yen. Moreover, investment in the Shares may help to balance a portfolio or protect against currency swings, thereby reducing overall risk.

Investors may wish to invest in Japanese Yen in order to take advantage of short-term tactical or long-term strategic opportunities. From a tactical perspective, an investor that believes that the U.S. dollar is weakening relative to the Japanese Yen may choose to buy Shares in order to capitalize on the potential movement. An investor that believes that the Japanese Yen is overvalued relative to the U.S. dollar may choose to sell Shares. Sales may also include short sales that are permitted under SEC and exchange regulations.

From a strategic standpoint, since currency movements can affect returns on cross-border investments and businesses, both individual investors and businesses may choose to hedge their currency risk through the purchase or sale of Japanese Yen. For example, in the case where a U.S. investor has a portfolio consisting of Japanese equity and fixed income securities, the investor may decide to hedge the currency exposure that exists within the Japanese portfolio by selling an appropriate amount of Shares. Again, such sales may include short sales in accordance with applicable SEC regulations. In doing this, the U.S. investor may be able to mitigate the impact that changes in exchange rates have on the returns associated with the Japanese equity and fixed income components of the portfolio.

Similarly, a business that has currency exposure because it manufactures or sells its products abroad is exposed to exchange rate risk. Buying or selling Shares in appropriate amounts can reduce the business’s exchange rate risk.

More generally, investors that wish to diversify their investment portfolios with a wider range of non-correlative investments may desire to invest in foreign currencies. Non-correlative asset classes, such as foreign currencies, are often used to enhance investment portfolios by making them more consistent and less volatile. Less volatility means lower risk and closer proximity to an expected return.

COST-EFFICIENT PARTICIPATION IN THE MARKET FOR JAPANESE YEN

The Shares are intended to offer investors a new and different opportunity to participate in the market for Japanese Yen through an investment in securities. Historically, the logistics and expense of investing in foreign exchange have been a barrier to entry for many investors. This offering is aimed at overcoming the barriers to entry. A prospective purchaser of Shares should not encounter any tasks or costs beyond those associated with purchasing another publicly-traded equity security. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding Japanese Yen. The Shares are an investment that is:

Easily Accessible.    Investors will be able to access the market for Japanese Yen through a traditional brokerage account. When admitted to trading, the Shares will be bought and sold on the NYSE like any other exchange-listed security, except that they will regularly be traded until 4:15 PM (New York time) instead of 4:00 PM (New York time).

Cost-Effective.    Investors and businesses wishing to buy or sell currencies in modest size have had to pay as much as a 3% commission to effectuate their transactions. Because Shares will be traded as securities, transaction costs will be substantially reduced.

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Exchange-Traded.    Because they will be traded on the NYSE, the Shares will provide investors with an efficient means of implementing investment tactics and strategies that involve Japanese Yen. NYSE-listed securities are eligible for margin accounts. Accordingly, investors will be able to purchase and hold Shares with borrowed money to the extent permitted by law.

Transparent.    The Shares will be backed by the assets of the Trust, which will not hold or use derivative products. The value of the holdings of the Trust will be reported on the Trust’s website, www.currencyshares.com, every business day.

INTEREST ON DEPOSITED JAPANESE YEN

JPMorgan Chase Bank, N.A., London Branch will maintain two deposit accounts for the Trust, a primary deposit account which will earn interest and a secondary deposit account which will not earn interest. Interest on the primary deposit account accrues daily at an initial annual nominal rate of the Bank of Japan Overnight Call Rate minus 27 basis points, and is paid monthly. The Depository changes the rate based upon changes in the Bank of Japan Overnight Call Rate, other market conditions or the Depository’s liquidity needs. If the Sponsor believes that the interest rate paid by the Depository is not competitive, the Sponsor’s recourse will be to remove the Depository by terminating the Deposit Account Agreement and closing the accounts. The secondary deposit account will only be used in connection with mid-month creations and redemptions of Baskets, to account for interest that has been earned on the primary deposit account during the month but not yet paid, and to receive interest earned on the primary deposit account, pay Trust expenses. See “Description of the Deposit Account Agreement.”

Each month the Depository will deposit into the secondary deposit account accrued but unpaid interest and the Trustee will withdraw Japanese Yen from the secondary deposit account to pay the accrued Sponsor’s fee for the previous month plus other Trust expenses, if any. In the event that the interest deposited exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, then the Trustee will direct that the excess be converted into USD at a prevailing market rate and the Trustee will distribute the USD as promptly as practicable to Shareholders on a pro rata basis (in accordance with the number of Shares that they own).

TRUST EXPENSES

The Trust’s only ordinary recurring expense is expected to be the Sponsor’s fee. The Sponsor has agreed to assume and pay the following administrative and marketing expenses of the Trust: the Trustee’s monthly fee, typical maintenance and transaction fees of the Depository, NYSE listing fees, printing and mailing costs, audit fees and expenses, up to $100,000 per annum in legal fees and expenses, and applicable license fees. The Sponsor will also pay the costs of the Trust’s organization and the costs of the initial sale of the Shares, including the applicable SEC registration fees. The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Japanese Yen in the Trust. Each month, the Trust will first withdraw Japanese Yen the Trust has earned as interest to pay the Sponsor’s fee and any other Trust expenses that have been incurred. If that interest is not sufficient to fully pay the Sponsor’s fee and other Trust expenses, then the Trustee will withdraw Japanese Yen as needed from the primary deposit account to pay these expenses. Shareholders do not have the option of choosing to pay their proportionate share of the excess expenses in lieu of having their share of expenses paid by withdrawing Japanese Yen from the primary deposit account. If the Trust were to incur expenses in USD (which is not anticipated), Japanese Yen will be converted to USD at the prevailing market rate at the time of conversion to pay these expenses. The payment of expenses in Japanese Yen and the conversion of Japanese Yen to USD, if required to pay expenses of the Trust, are taxable events to Shareholders. See “United States Federal Tax Consequences — Taxation of U.S. Shareholders.”

In certain exceptional cases the Trust will pay for some expenses in addition to the Sponsor’s fee. These exceptions include expenses not assumed by the Sponsor (described in the immediately preceding paragraph), taxes and governmental charges, expenses and costs of any extraordinary services performed by the Trustee or the Sponsor on behalf of the Trust or action taken by the Trustee or the Sponsor to

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protect the Trust or the interests of Shareholders, indemnification of the Sponsor under the Depositary Trust Agreement, and legal expenses in excess of $100,000 per year.

In the event that none of the expenses in the immediately preceding paragraph are charged to the Trust, an investment of $10,000 in Shares will incur an annual fee of approximately $40 or approximately $200 over five years. Based on current interest rates, approximately $9 per year or $45 over five years will be offset by interest earned. Additionally, investors should expect to pay customary brokerage fees and expenses for each purchase or sale of Shares. An Authorized Participant will pay a $500 transaction fee to the Trustee, which will not be contributed to the Trust, for each creation or redemption order.

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Description of the Trust

The Trust was formed under the laws of the State of New York on [                    ], 200     when the Sponsor and the Trustee signed the Depositary Trust Agreement and the Sponsor deposited 10,000 Japanese Yen in the primary deposit account. The Trust holds Japanese Yen and is expected from time to time to issue Baskets in exchange for deposits of Japanese Yen and to distribute Japanese Yen in connection with redemptions of Baskets. The investment objective of the Trust is for the Shares to reflect the price in USD of the Japanese Yen. The material terms of the Depositary Trust Agreement are discussed under “Description of the Depositary Trust Agreement.” The Shares represent units of fractional undivided beneficial interest in, and ownership of, the Trust. The Trust is not managed like a business corporation or an active investment vehicle. The Japanese Yen held by the Trust will only be sold (1) if needed to pay Trust expenses, (2) in the event the Trust terminates and liquidates its assets or (3) as otherwise required by law or regulation. The payment of expenses in Japanese Yen and the conversion of Japanese Yen to USD, if necessary to pay expenses of the Trust, are taxable events to Shareholders. See “United States Federal Tax Consequences — Taxation of U.S. Shareholders.”

The Trust is not registered as an investment company under the Investment Company Act and is not required to register under such Act.

The Trust creates and redeems Shares from time to time, but only in whole Baskets. A Basket is a block of 50,000 Shares. The number of Shares outstanding is expected to increase and decrease from time to time as a result of the creation and redemption of Baskets. Authorized Participants pay for Baskets with Japanese Yen. Shareholders pay for Shares with U.S. dollars.

The creation and redemption of Baskets requires the delivery to the Trust or the distribution by the Trust of the amount of Japanese Yen represented by the Baskets being created or redeemed. This amount is based on the total Japanese Yen represented by the number of Shares included in the Baskets being created or redeemed. Baskets may be created or redeemed only by Authorized Participants, which pay a transaction fee of $500 to the Trustee for each order to create or redeem Baskets. Authorized Participants may sell to other investors all or part of the Shares included in the Baskets that they purchase from the Trust. See “Plan of Distribution.”

The Trustee will calculate, and the Sponsor will publish, the Trust’s NAV each business day. To calculate the NAV, the Trustee will add to the amount of Japanese Yen in the Trust at the end of the preceding day accrued but unpaid interest, Japanese Yen receivable under pending purchase orders and the value of other Trust assets, and will subtract the accrued but unpaid Sponsor’s fee, Japanese Yen payable under pending redemption orders and other Trust expenses and liabilities, if any. The NAV will be expressed in USD based on the Noon Buying Rate. The Trustee also determines the NAV per Share, which equals the NAV of the Trust divided by the number of outstanding Shares. See “Description of the Depositary Trust Agreement — Valuation of Japanese Yen, Definition of Net Asset Value” for a more detailed description of how the NAV of the Trust and the NAV per Share are calculated.

The Trust’s assets will consist only of Japanese Yen on demand deposit in two Japanese Yen-denominated accounts at JPMorgan Chase Bank, N.A., London Branch: an interest-bearing primary deposit account and a non-interest bearing secondary account. The Trust will not hold any derivative products. Each Share represents a proportional interest, based on the total number of Shares outstanding, in the Japanese Yen owned by the Trust, plus accrued and unpaid interest less accrued but unpaid expenses (both asset-based and non-asset based) of the Trust. The Sponsor expects that the price of a Share will fluctuate in response to fluctuations in the price of the Japanese Yen and that the price of a Share will reflect accumulated interest as well as the estimated accrued but unpaid expenses of the Trust.

Investors may obtain, 24 hours a day, foreign exchange pricing information based on the spot price of Japanese Yen from various financial information service providers. Current spot prices are also generally available with bid/ask spreads from foreign exchange dealers. In addition, the Trust’s website, www.currencyshares.com, will provide ongoing pricing information for Japanese Yen spot prices and the Shares. Market prices for the Shares are available from a variety of sources, including brokerage firms,

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information websites and other information service providers. One such website is hosted by Bloomberg, http://www.bloomberg.com/markets/currencies/asiapac_currencies.html, and it regularly reports current foreign exchange pricing information. The NAV of the Trust is published by the Sponsor on each day that the NYSE is open for regular trading and is posted on the Trust’s website.

The Trust will terminate upon the occurence of any of the termination events listed in the Depositary Trust Agreement and will otherwise terminate on [                    ], 204    . See “Description of the Depositary Trust Agreement — Termination of the Trust.”

The Sponsor

The Sponsor of the Trust is Rydex Specialized Products LLC, a Delaware limited liability company. The sole member of Rydex Specialized Products LLC is PADCO Advisors II, Inc., a Maryland corporation that is a privately-held company owned and controlled by two irrevocable trusts. The Sponsor and its affiliates collectively do business as “Rydex Investments.” The principal offices of the Sponsor and the Trust are the offices of Rydex Investments at 9601 Blackwell Road, Suite 500, Rockville, Maryland 20850, and the Sponsor does not own or lease any other property.

Rydex Specialized Products LLC sponsored the first exchange-traded products limited solely to particular foreign currency, the CurrencyShares Euro Trust (NYSE: FXE). Rydex also sponsors six additional exchange-traded products limited solely to foreign currency, as follows: CurrencyShares Australian Dollar Trust (NYSE: FXA); CurrencyShares British Pound Sterling Trust (NYSE: FXB); CurrencyShares Canadian Dollar Trust (NYSE: FXC); CurrencyShares Mexican Peso Trust (NYSE: FXM); CurrencyShares Swedish Krona Trust (NYSE: FXS); and CurrencyShares Swiss Franc Trust (NYSE: FXF).

Currently, Rydex Investments manages more than 60 open-end mutual funds and 24 exchange-traded funds with a combined net asset value of $14.7 billion at December 31, 2006. Since May of 2005, Rydex Investments has been managing two currency mutual funds, both benchmarked to the USD Index. The USD Index is an average of six major exchange rates providing a general indication of the international value of the USD.

The Sponsor is responsible for establishing the Trust and for the registration of the Shares. The Sponsor generally oversees the performance of the Trustee and the Trust’s principal service providers, but does not exercise day-to-day oversight over the Trustee or such service providers. The Sponsor regularly communicates with the Trustee to monitor the overall performance of the Trust. The Sponsor, with assistance and support from the Trustee, is responsible for preparing and filing periodic reports on behalf of the Trust with the SEC and will provide any required certification for such reports. The Sponsor will designate the independent registered public accounting firm of the Trust and may from time to time employ legal counsel for the Trust.

The Distributor will assist the Sponsor in marketing the Shares. The Sponsor may determine to engage additional or successor distributors. See “The Distributor” for more information about the Distributor.

The Sponsor maintains a public website on behalf of the Trust, www.currencyshares.com, which contains information about the Trust and the Shares, and oversees certain Shareholder services, such as a call center and prospectus delivery.

The Sponsor may direct the Trustee in the conduct of its affairs, but only as provided in the Depositary Trust Agreement. For example, the Sponsor may direct the Trustee to terminate the Trust if certain criteria are met. The Sponsor anticipates that, if the market capitalization of the Trust is less than $300 million at any time for five consecutive trading days beginning after the first anniversary of the Trust’s inception, then the Sponsor will, in accordance with the Depositary Trust Agreement, direct the Trustee to terminate and liquidate the Trust. If the Trustee shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or a trustee or liquidator or any public officer shall take charge or control of such Trustee or of its property or affairs for the purposes of rehabilitation, conservation or liquidation, then, in any such case, the Sponsor shall remove the Trustee,

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and such removal shall take effect upon the appointment of a successor trustee and its acceptance of such appointment. If at any time the Trustee ceases to be a qualified bank (as defined in the Depositary Trust Agreement) or is in material breach of its obligations under the Depositary Trust Agreement and the Trustee fails to cure such breach within 30 days after receipt by the Trustee of written notice specifying such default from the Sponsor or Shareholders acting on behalf of at least 25% of the outstanding Shares, the Sponsor may remove the Trustee. See “Description of the Depositary Trust Agreement — The Trustee — Resignation, discharge or removal of trustee; successor trustees” for more information.

Fees are paid to the Sponsor as compensation for services performed under the Depositary Trust Agreement. The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Japanese Yen in the Trust.

M7 Ventures, LLC, a Delaware limited liability company, is providing product development support and consulting to the Sponsor in connection with the registration of this offering and is expected to provide support and consulting services to the Sponsor for the duration of the Trust. M7 and the Sponsor have also agreed to collaborate with one another relative to the development and offering of other related currency products. M7 has invested significant resources in the development of the Shares. In consideration of M7’s efforts, past and future, the Sponsor has agreed to pay M7 a recurring fee for the duration of the Trust. M7 and the Sponsor have agreed to keep confidential all confidential and proprietary information that they share with one another. M7 has agreed not to solicit, initiate or encourage any inquiries, proposals or offers from anyone other than the Sponsor regarding the development of the Trust or of any other related currency products.

The Trustee

The Bank of New York, a banking corporation with trust powers organized under the laws of the State of New York, serves as the Trustee. BNY has a trust office at 2 Hanson Place, Brooklyn, New York 11217. BNY is subject to supervision by the New York State Banking Department and the Board of Governors of the U.S. Federal Reserve System. Information regarding creation and redemption Basket composition, the NAV of the Trust, transaction fees and the names of the parties that have executed Participant Agreements may be obtained from BNY. A copy of the Depositary Trust Agreement is available for inspection at BNY’s trust office identified above and on the SEC’s website at www.sec.gov. Under the Depositary Trust Agreement, the Trustee may be removed if it fails to maintain capital, surplus and undivided profits of $500 million.

The Trustee will earn a monthly fee that will be paid by the Sponsor.

The Trustee is generally responsible for the day-to-day administration of the Trust, including keeping the Trust’s operational records. The Trustee’s principal responsibilities include withdrawing the Trust’s Japanese Yen as needed to pay the Trust’s expenses (Japanese Yen withdrawals are expected to occur approximately monthly in the ordinary course), calculating the NAV of the Trust and the NAV per Share, receiving and processing orders from Authorized Participants to create and redeem Baskets and coordinating the processing of such orders with the Depository and DTC. See “The Depository.” The Trustee is not responsible for the overall performance of the Trust.

Following payment of the Sponsor’s fee and other Trust expenses, if any, the Trustee will direct that any interest on the primary deposit account that exceeds the Trust’s expenses be converted into USD and the Trustee will distribute the USD as promptly as practicable to Shareholders. See “Investment Attributes of the Trust — Interest on Deposited Japanese Yen.”

The Trustee intends to regularly communicate with the Sponsor regarding administration of the Trust. The Trustee, along with the Sponsor, consults with the Trust’s legal, accounting and other professional service providers as needed. The Trustee assists and supports the Sponsor with the preparation of all periodic reports required to be filed with the SEC on behalf of the Trust.

Affiliates of the Trustee may from time to time act as Authorized Participants or purchase or sell Japanese Yen or Shares for their own account.

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The Depository

JPMorgan Chase Bank, N.A., London Branch is the Depository. The Depository accepts Japanese Yen deposited with it as a banker by Authorized Participants in connection with the creation of Baskets. The Depository facilitates the transfer of Japanese Yen into and out of the Trust through the primary and secondary deposit accounts maintained with it as a banker by the Trust.

The Depository will pay interest on the primary deposit account. Interest on the primary deposit account accrues daily at an initial annual nominal rate of the Bank of Japan Overnight Call Rate minus 27 basis points, and is paid monthly. Each month the Depository will deposit into the secondary deposit account accrued but unpaid interest.

The Depository will not be paid a fee for its services to the Trust. The Depository may earn a “spread” or “margin” over the rate of interest it pays to the Trust on the Japanese Yen deposit balances.

The Depository is not a trustee for the Trust or the Shareholders. For further information about the function of the Depository, see “Description of the Deposit Account Agreement.”

The Depository and its affiliates may from time to time act as Authorized Participants or purchase or sell Japanese Yen or Shares for their own account, as agent for their customers and for accounts over which they exercise investment discretion.

The Distributor

Rydex Distributors, Inc., a Maryland corporation, is the Distributor. The Distributor is a registered broker-dealer with the SEC and is a member of NASD.

The Distributor is assisting the Sponsor in developing a marketing plan for the Trust on an ongoing basis, preparing marketing materials regarding the Shares, including the content on the Trust’s website, www.currencyshares.com, executing the marketing plan for the Trust, and providing strategic and tactical research on the global foreign exchange market. The Distributor and the Sponsor are affiliates of one another. There is no written agreement between them, and no compensation is paid by the Sponsor to the Distributor in connection with services performed by the Distributor for the Trust. For more information about the distribution of the Shares, see “Plan of Distribution” elsewhere in this prospectus.

Description of the Shares

The Trustee is authorized under the Depositary Trust Agreement to create and issue an unlimited number of Shares. The Trustee will create Shares only in Baskets (a Basket being a block of 50,000 Shares) and only upon the order of an Authorized Participant. The Shares represent units of fractional undivided beneficial interest in, and ownership of, the Trust and have no par value. Any creation and issuance of Shares above the amount registered with the SEC on the registration statement of which this prospectus is a part will require registration with the SEC (and listing with the NYSE) of the additional Shares.

LIMITED RIGHTS

The Shares are not a traditional investment. They are dissimilar from the “shares” of a corporation operating a business enterprise, with management and a board of directors. Trust Shareholders do not have rights normally associated with owning shares of a business corporation, including, for example, the right to bring “oppression” or “derivative” actions. Shareholders’ have only those rights explicitly set forth in the Depositary Trust Agreement. All Shares are of the same class with equal rights and privileges. Each Share is transferable, is fully paid and non-assessable and entitles the holder to vote on the limited matters upon which Shareholders may vote under the Depositary Trust Agreement. The Shares do not entitle their holders to any conversion or pre-emptive rights or, except as provided below, any redemption or distribution rights.

Distributions.    Each month the Depository will deposit into the secondary deposit account accrued but unpaid interest and the Trustee will withdraw Japanese Yen from the secondary deposit account to pay

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the accrued Sponsor’s fee for the previous month plus other Trust expenses, if any. In the event that the interest deposited exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, then the Trustee will direct that the excess be converted into USD at a prevailing market rate and the Trustee will distribute the USD as promptly as practicable to Shareholders on a pro rata basis (in accordance with the number of Shares that they own). If the Trust were to incur expenses in USD (which is not anticipated), Japanese Yen will be converted to USD at the prevailing market rate at the time of conversion to pay these expenses. The payment of expenses in Japanese Yen and the conversion of Japanese Yen to USD, if required to pay expenses of the Trust, are taxable events to Shareholders. See “United States Federal Tax Consequences — Taxation of U.S. Shareholders.” .

Voting and Approvals.    Shareholders have no voting rights under the Depositary Trust Agreement, except in limited circumstances. If the holders of at least 25% of the Shares outstanding determine that the Trustee is in material breach of its obligations under the Depositary Trust Agreement, they may provide written notice to the Trustee (or require the Sponsor to do so) specifying the default and requiring the Trustee to cure such default. If the Trustee fails to cure such breach within 30 days after receipt of the notice, the Sponsor may remove the Trustee. The holders of at least 66 ²/3% of the Shares outstanding may vote to remove the Trustee. The Trustee must terminate the Trust at the request of the holders of at least 75% of the outstanding Shares.

Redemption of Shares.    The Shares may be redeemed only by or through an Authorized Participant and only in Baskets. See “Creation and Redemption of Shares” for details on the redemption of Shares.

BOOK-ENTRY FORM

The Sponsor and the Trustee will apply to DTC for acceptance of the Shares in its book-entry settlement system. If the Shares are eligible for book-entry settlement, all Shares will be evidenced by global certificates issued by the Trustee to DTC and registered in the name of Cede & Co., as nominee for DTC. The global certificates will evidence all of the Shares outstanding at any time. In order to transfer Shares through DTC, Shareholders must be DTC Participants. The Shares will be transferable only through the book-entry system of DTC. A Shareholder that is not a DTC Participant will be able to transfer its Shares through DTC by instructing the DTC Participant holding its Shares to transfer the Shares. Transfers will be made in accordance with standard securities industry practice.

Description of the Deposit Account Agreement

The Deposit Account Agreement between the Trust and the Depository, governed by the laws of England, establishes the Deposit Accounts. The Depository, as instructed by the Trustee, is authorized to accept Japanese Yen deposits for the account of the Trust. The Depository is not a trustee for the Trust or the Shareholders. The Depository, as a banker, is obligated to repay the balance of the Deposit Accounts to the Trust on demand and in accordance with the terms and conditions of the Deposit Account Agreement. The following is a description of other material terms of the Deposit Account Agreement.

DUAL ACCOUNTS

The Depository will maintain two deposit accounts for the Trust, a primary deposit account which will earn interest and a secondary deposit account which will not earn interest. The secondary deposit account will only be used in connection with mid-month creations and redemptions of Baskets, to account for interest that has been earned on the primary deposit account during the month but not yet paid, and to receive interest earned on the primary deposit account, pay Trust expenses and distribute any excess interest to Shareholders on a monthly basis.

REPORTS

The Depository provides the Trustee with account reports identifying the credits and debits of Japanese Yen to the Deposit Accounts, including the credit of interest in Japanese Yen to the secondary deposit

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account. The Trustee will be required to examine the reports and account statements it receives from the Depository within a reasonable time of receipt and promptly notify the Depository of any discrepancy of which it becomes aware.

The Depository’s records of all deposits and withdrawals of Japanese Yen to the Deposit Accounts and all credits of interest in Japanese Yen to the secondary deposit account that may occur on a business day, and the end-of-business-day account balances in the Deposit Accounts are stated as of the close of the Depository’s business (usually 4:00 PM, London time) on that business day.

FEES AND EXPENSES

Under the Deposit Account Agreement, the Depository is entitled to invoice the Trustee or debit the secondary deposit account for out-of-pocket expenses. The Trust has also agreed to reimburse the Depository for any taxes, levies, imposts, deductions, charges, stamp, transaction and other duties and withholdings in connection with the Deposit Accounts, except for such items imposed on the overall net income of the Depository. Except for the reimbursable expenses just described, the Depository will not be paid a fee for its services to the Trust. The Depository may earn a “spread” or “margin” on the Japanese Yen deposit balances it holds.

DEPOSIT ACCOUNT BALANCES

The Japanese Yen received by the Trust upon the creation of Baskets will be deposited, in each case, into the primary deposit account; a small portion of the Japanese Yen may be deposited in the secondary deposit account to account for interest that has been earned on the primary deposit account during the month but not yet paid. If the Sponsor believes that the interest rate paid by the Depository is not adequate, the Sponsor’s recourse will be to remove the Depository by terminating the Deposit Account Agreement and closing the accounts. Neither the Trustee nor the Sponsor has the power or authority to deposit the Trust’s Japanese Yen with any other person, entity or account. Resignation or removal of the Depository for any reason will cause termination of the Trust. See “Description of the Depositary Trust Agreement.” Interest earned on the balance of the primary deposit account will be used primarily to pay the Trust’s expenses.

INTEREST

Interest will begin to be earned on the day Baskets are created (i.e., the date the trade settles), which will occur three days after funds are transferred by an Authorized Participant to the primary deposit account held by the Depository. Interest on the primary deposit account accrues daily at an initial annual nominal rate of the Bank of Japan Overnight Call Rate minus 27 basis points, and is paid monthly. Interest does not compound, and therefore interest will not be earned on interest accrued but not yet paid by the Depository. Each month the Depository will deposit into the secondary deposit account accrued but unpaid interest. Interest earned on the balance of the primary deposit account will be used primarily to pay the Trust’s expenses; any interest remaining after payment of the Sponsor’s fee and other expenses, if any, will be distributed to the Shareholders approximately ten days after the end of the month.

MAXIMUM BALANCE

The Depository reserves the right not to accept, and to return without interest to the remitter of funds, the amounts received for deposit to the Deposit Accounts if the aggregate deposit liability of the Depository exceeds the Japanese Yen equivalent of $2.75 billion, calculated on the basis of the Noon Buying Rate.

EXCLUSION OF LIABILITY

The Depository will be responsible only for direct loss or damage that the Trust suffers resulting from the Depository’s gross negligence or willful misconduct. Unless such loss or damages are due to the Depository’s fraud, the Depository will not be liable for loss of business, profits or goodwill or any

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indirect, consequential, punitive or special damages, whether or not reasonably foreseeable, even if the Depository has been advised of the likelihood of such loss and even if such loss is the result of negligence, breach of contract or otherwise.

INDEMNITY

The Trust will, solely out of the Trust’s assets, indemnify the Depository and each of its officers, directors, employees, subsidiaries and affiliates on demand against all costs and expenses, damages, claims, liabilities and losses (including legal fees) which the Depository or any such officer, director, employee, subsidiary or affiliate may suffer or incur directly or indirectly because of the Trust’s breach of the Deposit Account Agreement, because the Depository acted on what it believed (in good faith and without gross negligence) to be the Trustee’s communication or because of anything done under or as contemplated by the Deposit Account Agreement.

FORCE MAJEURE

The Depository is not liable for any damage, loss, expense or liability caused by acts of God, fire, flood, civil or labor disturbance, war or terrorism, act of any governmental authority or other act or threat of any authority, legal constraint, fraud or forgery (other than on the part of the Depository or any of its directors, officers or employees), malfunction of equipment (including any computer or related software) except where such malfunction is primarily attributable to the Depository’s gross negligence in maintaining the equipment or software, failure of or the effect of rules or operations of any funds transfer system, inability to obtain or interruption of communications facilities, or any cause beyond the reasonable control of the Depository.

TERMINATION

The Depository may terminate the Deposit Account Agreement for any reason whatsoever upon 90 business days’ prior notice. Before the expiration of such notice, the Depository will transfer any cleared balance in the Deposit Accounts in accordance with the Trustee’s reasonable instructions. Any termination of the Deposit Account Agreement will cause the termination of the Trust.

GOVERNING LAW; JURISDICTION

The Deposit Account Agreement is governed by the laws of England and the Depository is subject to the laws of England. The Trust and the Depository consent to the non-exclusive jurisdiction of the courts of England to settle any dispute relating to the Deposit Account Agreement.

Creation and Redemption of Shares

The Trust creates and redeems Shares in Baskets on a continuous basis. A Basket is a block of 50,000 Shares. The creation and redemption of Baskets requires the delivery to the Trust or the distribution by the Trust of the amount of Japanese Yen represented by the Baskets being created or redeemed. This amount is based on the combined NAV per Share of the number of Shares included in the Baskets being created or redeemed, determined on the day the order to create or redeem Baskets is accepted by the Trustee.

Authorized Participants are the only persons that may place orders to create and redeem Baskets. An Authorized Participant is a DTC Participant that is a registered broker-dealer or other securities market participant such as a bank or other financial institution that is not required to register as a broker-dealer to engage in securities transactions and has entered into a Participant Agreement with the Trustee. Only Authorized Participants may place orders to create or redeem Baskets. Before initiating a creation or redemption order, an Authorized Participant must have entered into a Participant Agreement with the Sponsor and the Trustee. The Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery of Japanese Yen required for creations and redemptions. The Participant Agreements may be amended by the Trustee, the Sponsor and the relevant Authorized Participant. Authorized Participants pay a transaction fee of $500 to the Trustee for each order that they

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place to create or redeem one or more Baskets. Authorized Participants who make deposits with the Trust in exchange for Baskets receive no fees, commissions or other form of compensation or inducement of any kind from either the Sponsor or the Trust. No Authorized Participant has any obligation or responsibility to the Sponsor or the Trust to effect any sale or resale of Shares.

Authorized Participants are cautioned that some of their activities will result in their being deemed participants in a distribution in a manner which would render them statutory underwriters and will subject them to the prospectus-delivery and liability provisions of the Securities Act, as described in “Plan of Distribution.”

Certain Authorized Participants are expected to have the facility to participate directly in the global foreign exchange market. In some cases, an Authorized Participant may acquire Japanese Yen from, or sell Japanese Yen to, an affiliated foreign exchange trading desk, which may profit in these instances. The Sponsor believes that the size and operation of the foreign exchange market make it unlikely that an Authorized Participant’s direct activities in the foreign exchange and securities markets will impact the price of the Japanese Yen or the price of Shares. Each Authorized Participant will be registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, and will be regulated by the National Association of Securities Dealers, Inc., or else will be exempt from being (or otherwise will not be required to be) so registered or regulated, and will be qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Certain Authorized Participants may be regulated under federal and state banking laws and regulations. Each Authorized Participant will have its own set of rules and procedures, internal controls and information barriers as it determines to be appropriate in light of its own regulatory regime.

Authorized Participants may act for their own accounts or as agents for broker-dealers, depositaries and other securities or foreign currency market participants that wish to create or redeem Baskets. An order for one or more Baskets may be placed by an Authorized Participant on behalf of multiple clients. As of the date of this prospectus,                     ,                      and                      have each signed a Participant Agreement, and each of them, upon the effectiveness of its Participant Agreement, may create and redeem Baskets. Persons interested in purchasing Baskets should contact the Sponsor or the Trustee to obtain the contact information for the Authorized Participants. A Shareholder that is not an Authorized Participant will be able to redeem Shares only through an Authorized Participant.

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The following description of the procedures for the creation and redemption of Baskets is only a summary. For more detail, refer to the relevant provisions of the Depositary Trust Agreement and the form of Participant Agreement, each of which is an exhibit to the registration statement of which this prospectus is a part. See “Where You Can Find More Information” for information about where you can obtain the registration statement.

CREATION PROCEDURES

The following chart is intended to help you understand the creation process:

Creation Process

Summary:    In order to create a Basket, the Authorized Participant deposits the Basket Japanese Yen Amount with the Depository and orders Shares from the Trustee. The Authorized Participant must also pay the Trustee a $500 transaction fee, which will not be contributed to the Trust, for each purchase order. The Trustee directs DTC to credit Shares to the Authorized Participant. The Authorized Participant will then be able to sell Shares to Purchasers directly or on the NYSE or any other market in which the Shares may trade.

On any business day, an Authorized Participant may place an order with the Trustee to create one or more Baskets. For purposes of processing both purchase and redemption orders, a “business day” means any day other than a day when the NYSE is closed for regular trading. Purchase orders placed by 4:00 PM (New York time) on a business day will have that day as the purchase order date.

By placing a purchase order, an Authorized Participant agrees to deposit Japanese Yen with the Trust, as described below. Before the delivery of Baskets for a purchase order, the Authorized Participant must also have wired to the Trustee the non-refundable transaction fee due for the purchase order.

Determination of required deposits

The total deposit required to create each Basket, called the Basket Japanese Yen Amount, is an amount of Japanese Yen bearing the same proportion to the number of Baskets to be created as the total assets of the Trust (net of estimated accrued but unpaid expenses) bears to the total number of Baskets outstanding on the date that the purchase order is accepted by the Trustee. The amount of the required deposit is determined by dividing the amount of Japanese Yen held by the Trust (net of estimated

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accrued but unpaid expenses) by the number of Baskets outstanding. All questions as to the composition of a Basket Japanese Yen Amount are finally determined by the Trustee. The Trustee’s determination of the Basket Japanese Yen Amount shall be final and binding on all persons interested in the Trust.

Delivery of required deposits

An Authorized Participant who places a purchase order is responsible for delivering the Basket Japanese Yen Amount to the Trust’s primary deposit account with the Depository as directed in the Authorized Participant’s Participant Agreement. Authorized Participants will use the SWIFT system to make timely deposits through their bank correspondents in London. Upon receipt of the deposit of Japanese Yen from an Authorized Participant, the Trustee will direct DTC to credit the number of Baskets ordered to the Authorized Participant’s DTC account. The expense and risk of delivery, ownership and safekeeping of Japanese Yen until such Japanese Yen have been received by the Depository shall be borne solely by the Authorized Participant.

Rejection of purchase orders

The delivery of the Shares against deposits of Japanese Yen may be suspended generally, or refused with respect to particular requested deliveries, during any period when the transfer books of the Trustee are closed or if any such action is deemed necessary or advisable by the Trustee or the Sponsor for any reason at any time or from time to time. None of the Trustee, the Sponsor or the Depository will be liable for the rejection or acceptance of any purchase order or Basket Japanese Yen Amount.

REDEMPTION PROCEDURES

The following chart is intended to help you understand the redemption process:

Redemption Process

Summary:    In order to redeem Shares, an Authorized Participant must send the Trustee a redemption order specifying the number of Baskets that the Authorized Participant wishes to redeem. The Authorized Participant must also pay the Trustee a $500 transaction fee, which will not be contributed to the Trust, for each redemption order. The Trustee then instructs the Depository to send the Authorized Participant Japanese Yen and directs DTC to cancel the Authorized Participant’s Shares that were redeemed.

The procedures by which an Authorized Participant can redeem one or more Baskets mirror the procedures for the creation of Baskets. On any business day, an Authorized Participant may place an order with the Trustee to redeem one or more Baskets. Redemption orders placed by 4:00 PM (New York time) on a business day will have that day as the order redemption date. A redemption order so

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received is normally effective on the date it is received in satisfactory form by the Trustee. The redemption procedures allow Authorized Participants to redeem Baskets and do not entitle an individual Shareholder to redeem any Shares in an amount less than a Basket or to redeem Baskets other than through an Authorized Participant.

By placing a redemption order, an Authorized Participant agrees to deliver the Baskets to be redeemed through DTC’s book-entry system to the Depository as directed in the Authorized Participant’s Participant Agreement. Before the delivery of the redemption distribution for a redemption order, the Authorized Participant must also have wired to the Trustee the non-refundable transaction fee due for the redemption order.

Determination of redemption distribution

The redemption distribution from the Trust is a wire transfer, to an account of the redeeming Authorized Participant identified by the Authorized Participant, in the amount of the Japanese Yen held by the Trust evidenced by the Shares being redeemed, giving effect to all estimated accrued but unpaid interest and expenses. Redemption distributions are subject to the deduction of any applicable tax or other governmental charges that may be due. All questions as to the amount of a redemption distribution are finally determined by the Trustee. The Trustee’s determination of the amount shall be final and binding on all persons interested in the Trust.

Delivery of redemption distribution

The redemption distribution due from the Trust is delivered to the Authorized Participant as directed in the Authorized Participant’s Participant Agreement.

The Depository wires the redemption amount from the Trust’s primary deposit account with the Depository to an account of the redeeming Authorized Participant identified by the Authorized Participant. The Authorized Participant and the Trust are each at risk in respect of Japanese Yen credited to their respective accounts in the event of the Depository’s insolvency. See “Risk Factors — Japanese Yen held in the Deposit Accounts will not be segregated from the Depository’s assets . . .”

Suspension or rejection of redemption orders

The Trustee will reject a redemption order if the order is not in proper form as described in the Participant Agreement or if the fulfillment of the order, in the opinion of its counsel, might be unlawful.

CREATION AND REDEMPTION TRANSACTION FEE

To compensate the Trustee for services in processing the creation and redemption of Baskets, an Authorized Participant is required to pay a transaction fee to the Trustee of $500 per order to create or redeem Baskets. An order may include multiple Baskets. The transaction fee may be reduced or, with the consent of the Sponsor, increased. The Trustee shall notify DTC of any agreement to change the transaction fee and will not implement any increase in the fee for the redemption of Baskets until 30 days after the date of the notice.

TAX RESPONSIBILITY

Authorized Participants are responsible for any transfer tax, sales or use tax, recording tax, value added tax or similar tax or governmental charge applicable to the creation or redemption of Baskets, regardless of whether or not such tax or charge is imposed directly on the Authorized Participant, and agree to indemnify the Sponsor, the Trustee and the Trust if they are required by law to pay any such tax, together with any applicable penalties, additions to tax or interest thereon.

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Description of the Depositary Trust Agreement

Description of the Depositary Trust Agreement

The Trust will operate in accordance with the terms of a Depositary Trust Agreement among the Sponsor, the Trustee, the registered holders and beneficial owners of Shares and all persons depositing Japanese Yen for creation of Shares. The following is a description of the material terms of the Depositary Trust Agreement, which has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part.

THE SPONSOR

This section summarizes some of the important provisions of the Depositary Trust Agreement that apply to the Sponsor. For a general description of the Sponsor’s role concerning the Trust, see “The Sponsor.”

Limitation on Sponsor’s liability

The Sponsor is not subject to any liability under the Depositary Trust Agreement to any Shareholder or Authorized Participant, except that the Sponsor agrees to perform its duties specifically set forth in the Depositary Trust Agreement without negligence or bad faith. The Sponsor is not obligated to prosecute any action, suit or other proceeding with respect to the Trust property. The Sponsor is entitled to rely on advice received from legal counsel, accountants, any Authorized Participant, any Shareholder or any other person that the Sponsor in good faith believes is competent to give such advice. The Sponsor shall not be liable for any acts or omissions made by a successor sponsor. The Sponsor is not obligated to comply with any direction or instruction from any Shareholder or Authorized Participant regarding the Shares except to the extent specifically provided in the Depositary Trust Agreement.

Indemnification of the Sponsor

The Trustee indemnifies the Sponsor, its members, officers, employees and agents (each a “Sponsor Indemnified Party”) against, and holds each of them harmless from, any loss, liability, cost, expense or judgment caused by the negligence or bad faith of the Trustee or arising out of any information furnished in writing to the Sponsor by the Trustee expressly for use in this registration statement or any amendment hereto.

Each Sponsor Indemnified Party is indemnified by the Trust and held harmless against any loss, liability or expense incurred without (i) negligence, bad faith, willful misconduct or willful malfeasance on the part of the Sponsor Indemnified Party arising out of or in connection with the performance of its obligations under the Depositary Trust Agreement or (ii) reckless disregard on the part of the Sponsor Indemnified Party of its obligations and duties under the Depositary Trust Agreement. Such indemnity includes payment from the Trust of the costs and expenses of the Sponsor Indemnified Party in defending itself against any claim or liability in its capacity as a Sponsor Indemnified Party. Any amounts payable to the Sponsor Indemnified Party may be payable in advance or secured by a lien on the Trust. The Sponsor may, in its discretion, undertake any action that it may deem necessary or desirable in respect of the Shareholders and, in such event, the legal expenses and costs of such actions shall be expenses and costs of the Trust and the Sponsor shall be entitled to reimbursement by the Trust.

Resignation of the Sponsor; successor sponsor

The Sponsor may resign its position as sponsor at any time by delivering to the Trustee a written resignation. Thereafter, the Trustee may do any one or more of the following: (1) appoint a successor sponsor to assume, with such compensation from the Trust as the Trustee may deem reasonable under the circumstances, the duties and obligations of the Sponsor; (2) agree to act as sponsor without appointing a successor sponsor; or (3) terminate the Trust. The Trustee has no obligation to appoint a successor sponsor or to assume the duties of the Sponsor and will have no liability to any person because the Trust is terminated as described in the preceding sentence. The Sponsor’s resignation becomes effective when the Trustee appoints a successor sponsor and the successor sponsor accepts that appointment or the Trustee itself agrees to act as sponsor. Upon effective resignation, the Sponsor will

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be discharged and will no longer be liable in any manner except as to acts or omissions occurring before its resignation, and the new sponsor will then undertake and perform all duties and be entitled to all rights and compensation as sponsor under the Depositary Trust Agreement.

If the Sponsor fails to undertake or perform or becomes incapable of undertaking or performing any of its duties under the Depositary Trust Agreement or becomes bankrupt or its affairs are taken over by public authorities, the effect of that event shall be the same as if the Sponsor had given a notice of resignation.

The Sponsor may transfer all or substantially all of its assets to an entity which carries on the business of the Sponsor if at the time of the transfer the successor assumes all of the obligations of the Sponsor under the Depositary Trust Agreement. In such an event, the Sponsor will then be relieved of all further liability under the Depositary Trust Agreement.

THE TRUSTEE

This section summarizes some of the important provisions of the Depositary Trust Agreement that apply to the Trustee. For a general description of the Trustee’s role concerning the Trust, see “The Trustee.”

Qualifications of the Trustee

The Trustee and any successor trustee may be removed if it ceases to be a bank, trust company, corporation or national banking association organized and doing business under the laws of the United States or any of its states, and authorized under such laws to exercise corporate trust powers and be a DTC Participant or a participant in another securities depository then acting on behalf of the Trust. The Trustee and any successor trustee may be removed if fails to maintain capital, surplus and undivided profits of $500 million.

Limitation on Trustee’s liability

The Trustee is not subject to any liability under the Depositary Trust Agreement to any Shareholder or Authorized Participant, except that the Trustee agrees to perform its duties specifically set forth in the Depositary Trust Agreement without negligence or bad faith. The Trustee is not obligated to prosecute any action, suit or other proceeding with respect to the Trust property. The Trustee is entitled to rely on advice received from legal counsel, accountants, any Authorized Participant, any Shareholder or any other person that the Trustee in good faith believes is competent to give such advice. The Trustee shall not be liable for any acts or omissions made by a successor trustee. The Trustee is not obligated to comply with any direction or instruction from any Shareholder or Authorized Participant regarding the Shares except to the extent specifically provided in the Depositary Trust Agreement.

Indemnification of the Trustee

The Sponsor will indemnify the Trustee, its directors, employees and agents against, and hold each of them harmless from, any loss, liability, cost, expense or judgment (including, but not limited to, the reasonable fees and expenses of counsel) that is incurred by any of them and that arises out of or is related to (i) any offer or sale by the Trust of Baskets of Shares, (ii) acts performed or omitted pursuant to the Depositary Trust Agreement, and (iii) any filings with or submissions to the SEC in connection with or with respect to Shares. However, the Sponsor is not obligated to indemnify the Trustee for losses attributable to (x) the negligence or bad faith of, or material breach of the terms of the Depositary Trust Agreement by, the Trustee, (y) written information furnished in writing from the Trustee to the Sponsor expressly for use in this Registration Statement or any amendment hereto filed with the SEC, or (z) any misrepresentations or omissions made by an Authorized Participant (other than the Sponsor) in connection with the offer and sale of Shares.

Taxes

If any tax or other governmental charge becomes payable by the Trustee with respect to any transfer or redemption of Shares, such tax or other governmental charge will be payable by the Shareholders to the

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Trustee. The Trustee will refuse to effect any registration of transfer of such Shares or any withdrawal of Trust property represented by such Shares until such payment is made, and may withhold any distributions, or may sell for the account of the Shareholder thereof Trust property or Shares, and may apply such distributions or the proceeds of any such sale in payment of such tax or other governmental charge, and the Shareholder will remain liable for any deficiency. The Trustee shall distribute any net proceeds of a sale made under the preceding sentence that remain, after payment of the tax or other governmental charge, to the Shareholders entitled thereto as in the case of a distribution in cash.

Protection for amounts due to Trustee

The Trustee will withdraw from the secondary deposit account amounts necessary to pay the Trust expenses provided for in the Depositary Trust Agreement and any otherwise unpaid expenses thereunder. In the event that the Sponsor’s fee for the prior month plus other Trust expenses, if any, exceed the balance of the secondary deposit account, the Trustee will withdraw Japanese Yen from the primary deposit account to pay the excess. If requested by the Sponsor and agreed to by the Trustee, the Trustee will advance amounts out of its own funds for the payment of Trust expenses, up to $20,000. The Trustee will have a lien on the Deposit Accounts to the extent of all amounts advanced by it at the Sponsor’s request. This lien will be superior to the interest of the beneficial owners of the Shares.

Resignation, discharge or removal of Trustee; successor trustees

Resignation.    The Trustee may resign at any time by delivering written notice to the Sponsor. The Trustee’s resignation will take effect upon the appointment of a successor trustee and its acceptance of such appointment.

Removal by the Sponsor.    If the Trustee is adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property is appointed, or a trustee or liquidator or any public officer takes charge or control of the Trustee or of its property or affairs for the purposes of rehabilitation, conservation or liquidation, then the Sponsor is required to remove the Trustee, and such removal will take effect upon the appointment of a successor trustee and its acceptance of such appointment.

Removal by Shareholders.    The holders of at least two-thirds (66 ²/3%) of the Shares then outstanding may at any time remove the Trustee by written instrument or instruments delivered to the Trustee and Sponsor.

Removal for Material Breach.    If at any time the Trustee ceases to be a qualified bank under the Depositary Trust Agreement or is in material breach of its obligations under the Depositary Trust Agreement and the Trustee fails to cure such breach within 30 days after receipt by the Trustee of written notice specifying such default from the Sponsor or Shareholders acting on behalf of at least 25% of the outstanding Shares specifying, the Sponsor may remove the Trustee.

Appointing Successor Trustees.    If the Trustee resigns or is removed, the Sponsor will use its reasonable efforts to appoint a successor trustee that meets the requirements set forth in the Depositary Trust Agreement. Every successor trustee is required to execute and deliver to its predecessor and to the Sponsor a written acceptance of its appointment. The successor trustee will then become fully vested with all the rights, powers, duties and obligations of the Trustee. Nevertheless, the predecessor trustee, upon payment of all sums due it and on the written request of the Sponsor is required to execute and deliver an instrument transferring to the successor trustee all rights and powers of such predecessor hereunder, is required to duly assign, transfer and deliver all right, title and interest in the Trust property to such successor, and is required to deliver to such successor a list of the Shareholders of all outstanding Shares. The Sponsor or any such successor trustee is required to promptly mail notice of the appointment of such successor trustee to the Shareholders.

Trustee’s liability for successor trustee.    The Trustee will not be liable for any acts or omissions made by a successor trustee whether in connection with a previous act or omission of the Trustee or in connection with any matter arising wholly after the resignation of the Trustee, provided that in connection with the issue out of which such potential liability arises the Trustee performed its obligations without negligence or bad faith while it acted as Trustee.

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DISTRIBUTIONS

Each month the Depository will deposit into the secondary deposit account accrued but unpaid interest and the Trustee will withdraw Japanese Yen from the secondary deposit account to pay the accrued Sponsor’s fee for the previous month plus other Trust expenses, if any. In the event the Sponsor’s fee and any other Trust expenses exceed the interest earned on the primary deposit account, additional Japanese Yen will be withdrawn from the primary deposit account as required to cover the expenses. In the event that the interest deposited exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, then the Trustee will direct that the excess be converted into USD at a prevailing market rate and the Trustee will distribute the USD as promptly as practicable to Shareholders on a pro rata basis (in accordance with the number of Shares that they own)

ACTIONS TAKEN TO PROTECT THE TRUST

The Trustee and the Sponsor may each, in their own discretion, undertake any action that they consider necessary or desirable to protect the Trust or the interests of the Shareholders. The expenses incurred by the Trustee or the Sponsor in connection therewith (including the fees and disbursements of legal counsel) will be expenses of the Trust, and the Trustee and the Sponsor will be entitled to be reimbursed for those expenses by the Trust. The Trustee and Sponsor are, however, required to notify and consult with each other before undertaking any protective action or if the Trustee or Sponsor become aware of any development or event that affects the administration of the Trust but is not contemplated or provided for in the Depositary Trust Agreement.

VALUATION OF JAPANESE YEN, DEFINITION OF NET ASSET VALUE

The Trustee will calculate, and the Sponsor will publish, the Trust’s NAV each business day. To calculate the NAV, the Trustee will add to the amount of Japanese Yen in the Trust at the end of the preceding day accrued but unpaid interest, Japanese Yen receivable under pending purchase orders and the value of other Trust assets, and will subtract the accrued but unpaid Sponsor’s fee, Japanese Yen payable under pending redemption orders and other Trust expenses and liabilities, if any.

The result is the NAV of the Trust for that business day. The Trustee shall also divide the NAV of the Trust by the number of Shares outstanding for the date of the evaluation then being made, which figure is the “NAV per Share.” For purposes of the preceding sentence, the number of Shares deemed outstanding shall include Shares to be delivered under purchase orders having order dates on or before the preceding business day and shall exclude Shares to be surrendered under redemption orders having order dates on or before the preceding business day.

EXPENSES OF THE TRUST

The Trust’s only ordinary recurring expense is expected to be the Sponsor’s fee. The Sponsor is obligated under the Depositary Trust Agreement to pay the following administrative and marketing expenses of the Trust: the Trustee’s monthly fee, typical maintenance and transaction fees of the Depository, NYSE listing fees, printing and mailing costs, audit fees and expenses, up to $100,000 per annum in legal fees and expenses, and applicable license fees. The Sponsor is also obligated to pay the costs of the Trust’s organization and the costs of the initial sale of the Shares, including the applicable SEC registration fees.

The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Japanese Yen in the Trust. Each month, the Trust will first withdraw Japanese Yen the Trust has earned as interest to pay the Sponsor’s fee and any other Trust expenses that have been incurred. If that interest is not sufficient to fully pay the Sponsor’s fee and Trust expenses, then the Trustee will withdraw Japanese Yen from the primary deposit account as needed. If the Trust incurs expenses in USD (which is not anticipated), Japanese Yen will be converted to USD at the prevailing market rate at the time of conversion to pay expenses.

In certain exceptional cases the following expenses may be charged to the Trust in addition to the Sponsor’s fee: (1) expenses and costs of any extraordinary services performed by the Trustee or the Sponsor on behalf of the Trust or action taken by the Trustee or the Sponsor to protect the Trust or

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interests of Shareholders; (2) indemnification of the Sponsor; (3) taxes and other governmental charges; and (4) expenses of the Trust other than those the Sponsor is obligated to pay pursuant to the Depositary Trust Agreement, including legal fees and expenses over $100,000. If these additional expenses are incurred, the Trust will be required to pay these expenses by withdrawing deposited Japanese Yen and the amount of Japanese Yen represented by a Share will decline at such time. Accordingly, the Shareholders will effectively bear the cost of these other expenses, if incurred. Although the Trust cannot definitively state the frequency or magnitude of such expenses, the Trust predicts that they will occur infrequently, if at all.

In order to pay the Trust’s expenses, the Trustee will first withdraw Japanese Yen the Trust has earned as interest. In the event the Sponsor’s fee and any other Trust expenses exceed the interest earned, additional Japanese Yen will be withdrawn from the primary deposit account as required to cover the expenses. For expenses not payable in Japanese Yen, the Trustee will direct that Japanese Yen be converted to USD as necessary for the Trustee to pay the Trust’s expenses. The Trustee will direct that the smallest amount of Japanese Yen required to purchase amounts of USD sufficient to pay Trust expenses and the costs of currency conversion be withdrawn from the Trust. Neither the Trustee nor the Sponsor is liable for depreciation or loss incurred by reason of any conversion. See “United States Federal Tax Consequences — Taxation of U.S. Shareholders” for information on the tax treatment of Japanese Yen sales.

THE SECURITIES DEPOSITORY; BOOK-ENTRY-ONLY SYSTEM; GLOBAL SECURITY

It is anticipated that DTC will act as securities depository for the Shares. DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the U.S. Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of section 17A of the Securities Exchange Act. DTC was created to hold securities of DTC Participants and to facilitate the clearance and settlement of transactions in such securities among the DTC Participants through electronic book-entry changes. This eliminates the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly. DTC has agreed to administer its book-entry system in accordance with its rules and by-laws and the requirements of law.

The Sponsor and the Trustee will apply to DTC for acceptance of the Shares in its book-entry settlement system. If the Shares are eligible for book-entry settlement, individual certificates will not be issued for the Shares. Instead, global certificates will be signed by the Trustee and the Sponsor on behalf of the Trust, registered in the name of Cede & Co., as nominee for DTC, and deposited with the Trustee on behalf of DTC. The global certificates will evidence all of the Shares outstanding at any time. The representations, undertakings and agreements made on the part of the Trust in the global certificates will be made and intended for the purpose of binding only the Trust and not the Trustee or the Sponsor individually.

Upon the settlement date of any creation, transfer or redemption of Shares, DTC will credit or debit, on its book-entry registration and transfer system, the amount of the Shares so created, transferred or redeemed to the accounts of the appropriate DTC Participants. The Trustee and the Authorized Participants will designate the accounts to be credited and charged in the case of creation or redemption of Shares.

Beneficial ownership of the Shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in the Shares will be shown on, and the transfer of ownership will be effected only through, records maintained by DTC (with respect to DTC Participants), the records of DTC Participants (with respect to Indirect Participants) and the records of Indirect Participants (with respect to Shareholders that are not DTC Participants or Indirect Participants). A Shareholder is expected to receive from or through the

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DTC Participant maintaining the account through which the Shareholder purchased its Shares a written confirmation relating to the purchase.

A Shareholder that is not a DTC Participant may transfer its Shares through DTC by instructing the DTC Participant or Indirect Participant through which the Shareholder holds its Shares to transfer the Shares. A Shareholder that is a DTC Participant may transfer its Shares by instructing DTC in accordance with the rules of DTC. Transfers will be made in accordance with standard securities industry practice.

DTC may discontinue providing its service with respect to the Shares by giving notice to the Trustee and the Sponsor. Under such circumstances, the Trustee and the Sponsor would either find a replacement for DTC to perform its functions at a comparable cost or, if a replacement is unavailable, terminate the Trust.

The rights of the Shareholders generally must be exercised by DTC Participants acting on their behalf in accordance with the rules and procedures of DTC. Because it is anticipated that the Shares will only be held in book-entry form through DTC and DTC Participants, investors will rely on DTC, DTC Participants and any other financial intermediary through which they hold the Shares to receive the benefits and exercise the rights described in this section of the prospectus. Investors should consult with their brokers or banks to find out about procedures and requirements for securities held in book-entry form through DTC.

SHARE SPLITS

If the Sponsor believes that the per-Share price on the NYSE is outside a desirable trading range, then the Sponsor may direct the Trustee to declare a split or reverse split in the number of Shares outstanding and to make a corresponding change in the number of Shares constituting a Basket.

BOOKS AND RECORDS

The Trustee will keep books for the registration of Shares that will be open to inspection by any person who establishes to the Trustee’s satisfaction that such person is a registered Shareholder upon reasonable advance notice at all reasonable times during the usual business hours of the Trustee.

The Trustee keeps a copy of the Depositary Trust Agreement on file in its office which is available for inspection on reasonable advance notice at all reasonable times during its usual business hours by any registered Shareholder. A copy of the Depositary Trust Agreement has also been filed as an exhibit to the registration statement of which this prospectus is part and is available on the SEC’s website at www.sec.gov. Under the Depositary Trust Agreement, the Trustee may be removed if it fails to maintain capital, surplus and undivided profits of $500 million.

STATEMENTS, FILINGS AND REPORTS

After the end of each fiscal year and within the time period required by applicable law, the Sponsor will cause to be prepared an annual report for the Trust containing audited financial statements. The annual report will be in such form and contain such information as is then required by applicable laws, rules and regulations and may contain such additional information which the Sponsor determines will be included. The annual report will be filed with the SEC and the NYSE and shall be distributed to DTC and to such other persons, if any, and in such manner, as shall be required by applicable laws, rules and regulations.

The Sponsor is responsible for the registration and qualification of the Shares under the federal securities laws. The Sponsor will also prepare, or cause to be prepared, and file any periodic reports or current reports required under the Securities Exchange Act. The Trustee will assist and support the Sponsor in the preparation of such reports.

The Deposit Accounts will be audited, as required by law and as may be directed by the Sponsor, by independent certified public accountants designated from time to time by the Sponsor. The accountants’ report will be furnished by the Trustee to Shareholders upon request.

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The costs incurred in connection with such statements, filings and reports are expenses of the Sponsor. If, however, legal fees and expenses exceed $100,000 per year, the excess will be expenses of the Trust. See “Investment Attributes of the Trust — Trust Expenses.”

TERMINATION OF THE TRUST

The Trustee will set a date on which the Depositary Trust Agreement will terminate and mail notice of that termination to the registered holders of Shares at least 30 days prior to the date set for termination if any of the following occur:

• the Sponsor resigns or is unable to perform its duties or becomes bankrupt or insolvent and the Trustee does not appoint a successor and does not agree to act as sponsor;

• Shareholders holding at least 75% of the outstanding Shares notify the Trustee that they elect to terminate the Trust;

• the Depository resigns or is removed; or

• the Trustee receives notice from the IRS or from counsel for the Trust or the Sponsor that the Trust fails to qualify for treatment, or will not be treated, as a grantor trust under the Internal Revenue Code.

In addition, if any of the following events occurs, the Trustee will set a date on which the Depositary Trust Agreement will terminate and mail notice of that termination to the registered holders of Shares at least 30 days prior to the date set for termination if the Sponsor, having been notified by the Trustee of the occurrence of any such event, has notified the Trustee in writing that it has determined, in its sole discretion, to terminate the Depositary Trust Agreement:

• the Trustee is notified that the Shares are delisted from the NYSE and have not been approved for listing on another national securities exchange within five business days of their delisting;

• the SEC determines that the Trust is an investment company under the Investment Company Act, as amended, and the Trustee has actual knowledge of the determination;

• the Net Asset Value of the Trust remains less than $100 million for 30 consecutive business days at any time after the first 90 days of the Shares being traded on the NYSE;

• all of the Trust’s assets are sold;

• the aggregate market capitalization of the Trust, based on the closing price for the Shares, remains less than $300 million for five consecutive trading days beginning after the first anniversary of the Trust’s inception; or

• DTC stops providing book-entry settlement services for the Shares.

The Trustee may set a date on which the Trust will terminate and mail notice of that termination to the Shareholders at least 30 days prior to the date set for termination if 60 days have elapsed since the Trustee gave the Sponsor notice of its election to resign and no successor trustee appointed by the Sponsor has accepted appointment as Trustee.

The Trust will terminate on [                    ], 204     if it has not been terminated prior to that date.

AMENDMENTS

Subject to certain limitations prohibiting any amendment of certain sections of the Depositary Trust Agreement, the Trustee and the Sponsor may amend most provisions of the agreement without the consent of any Shareholders. Any amendment that imposes or increases any fees or charges (other than taxes and other governmental charges, registration fees or other such expenses) or that otherwise prejudices any substantial existing right of the Shareholders will not become effective as to outstanding Shares until 30 days after written notice of such amendment is given to the registered Shareholders. Every registered Shareholder, at the time any amendment so becomes effective, will be deemed, by continuing to hold any Shares or an interest therein, to consent and agree to such amendment and to be

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bound by the Depositary Trust Agreement as amended thereby. In no event will any amendment impair the right of the registered Shareholders to surrender Baskets of Shares and receive the amount of Trust property represented by the Baskets, except in order to comply with mandatory provisions of applicable law.

GOVERNING LAW; CONSENT TO NEW YORK JURISDICTION

The Depositary Trust Agreement, and the rights of the Sponsor, the Trustee and DTC (as registered owner of the Trust’s global certificates for Shares) and the Shareholders under the Depositary Trust Agreement, are governed by the laws of the State of New York. The Sponsor, the Trustee and DTC and, by accepting Shares, each DTC Participant and each Shareholder, consents to the jurisdiction of any state or federal court in The City of New York, State of New York, in which any suit or proceeding arising out of or relating to Shares, the Trust property or the Depositary Trust Agreement may be instituted.

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United States Federal Tax Consequences

The following discussion of the material U.S. federal income tax consequences that generally apply to the purchase, ownership and disposition of Shares by a U.S. Shareholder (as defined below), and certain U.S. federal income, gift and estate tax consequences that may apply to an investment in Shares by a Non-U.S. Shareholder (as defined below), represents, insofar as it describes conclusions as to U.S. federal tax law and subject to the limitations and qualifications described therein, the opinion of Foley & Lardner LLP, special United States federal tax counsel to the Sponsor. The discussion below is based on the Internal Revenue Code, Treasury Regulations promulgated under the Internal Revenue Code and judicial and administrative interpretations of the Internal Revenue Code, all as in effect on the date of this prospectus and all of which are subject to change either prospectively or retroactively. The tax treatment of Shareholders may vary depending upon their own particular circumstances. Certain Shareholders (including broker-dealers, traders or other investors with special circumstances) may be subject to special rules not discussed below. Moreover, the discussion below does not address the effect of any state, local or foreign tax law on an owner of Shares. Purchasers of Shares are urged to consult their own tax advisors with respect to all federal, state, local and foreign tax law considerations potentially applicable to their investment in Shares.

For purposes of this discussion, a “U.S. Shareholder” is a Shareholder that is:

• An individual who is treated as a citizen or resident of the United States for U.S. federal income tax purposes;

• A corporation created or organized in or under the laws of the United States or any political subdivision thereof;

• An estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

• A trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (within the meaning of Internal Revenue Code section 7701(a)(30)) have the authority to control all substantial decisions of the trust, or if the trust has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

For purposes of this discussion, a “Non-U.S. Shareholder” is a Shareholder that is not a U.S. Shareholder as defined above and that is classified for U.S. federal income tax purposes as being neither a partnership nor a “disregarded entity.” For U.S. federal income tax purposes, the treatment of any beneficial owner of an interest in an entity classified as a partnership for U.S. federal income tax purposes will generally depend upon the status of the partner and upon the activities of the partnership. Partnerships and partners in partnerships should consult their tax advisors about the U.S. federal income tax consequences of purchasing, owning and disposing of Shares. For U.S. federal income tax purposes, the assets held by any entity that is classified as a “disregarded entity” and that has a single member are generally deemed to be held directly by such member.

TAXATION OF THE TRUST

The Trust is classified as a “grantor trust” for U.S. federal income tax purposes. As a result, the Trust itself is not subject to U.S. federal income tax. Instead, the Trust’s income and expenses “flow through” to the Shareholders, and the Trustee will report the Trust’s income, gains, losses and deductions to the Internal Revenue Service on that basis.

TAXATION OF U.S. SHAREHOLDERS

Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro-rata share of the assets held in the Trust. Shareholders also will be treated as if they directly received their respective pro-rata shares of the Trust’s income, if any, and as if they directly incurred their respective pro-rata shares of the Trust’s expenses. In the case of a U.S. Shareholder that acquires Shares as part of a creation of a Basket, the delivery of Japanese Yen to the Trust in exchange for the Shares

43

will not be a taxable event to the Shareholder. With respect to the increase in the amount of the U.S. Shareholder’s share of the Japanese Yen held in the Trust that results from such a delivery, the Shareholder’s aggregate tax basis (as determined immediately after such delivery) in those Japanese Yen that are held in the Trust and that are attributable to such increase, and the Shareholder’s aggregate tax basis in the Shares received upon such delivery, will each be the same as the Shareholder’s aggregate tax basis (as determined immediately prior to such delivery) in the Japanese Yen that are delivered by the Shareholder to the Trust.

Any Shares that are received by a U.S. Shareholder to evidence the Shareholder’s pro-rata share of any interest earnings of the Trust generally will have a tax basis equal to the USD-equivalent of the amount of the Shareholder’s pro-rata share of the interest earnings.

When the Trust converts Japanese Yen to USD — for example, to pay expenses incurred in USD (which is not anticipated) or to make distributions to Shareholders — or when the Trust pays expenses in Japanese Yen, a U.S. Shareholder generally will recognize gain or loss in an amount equal to the difference between (1) the Shareholder’s pro-rata share of the amount realized by the Trust upon the conversion, or the Shareholder’s pro-rata share of the USD-equivalent of the Japanese Yen used to pay expenses, and (2) the Shareholder’s tax basis for its pro-rata share of the Japanese Yen that were converted or used to pay expenses. As described in “Investment Attributes of the Trust — Trust Expenses” and “Description of the Depositary Trust Agreement — Expenses of the Trust”, each month the Trustee will first withdraw Japanese Yen the Trust has earned as interest to pay expenses. It is anticipated that the conversion of Japanese Yen (for purposes of paying expenses and making distributions) and the payment of expenses in Japanese Yen will occur on the same day that the Trust receives Japanese Yen earned as interest. The Trust will use a “last in first out” method to determine the tax basis of the Japanese Yen that are converted to USD or used to pay expenses. Accordingly, U.S. Shareholders will recognize interest income at the time that Japanese Yen are received by the Trust as interest earnings, but will generally recognize no further gain or loss if the Japanese Yen received are, on the date of receipt, either converted to USD or used to pay expenses.

The Sponsor’s fee accrues daily and is payable monthly. For U.S. federal income tax purposes, an accrual-basis U.S. Shareholder generally will be required to take into account as an expense its allocable share of the USD-equivalent of the amount of the Sponsor’s fee that is accrued on each day, with such USD-equivalent being determined by the currency exchange rate that is in effect on the respective day. To the extent that the currency exchange rate on the date of payment of the accrued amount of the Sponsor’s fee differs from the currency exchange rate in effect on the day of accrual, the U.S. Shareholder will recognize a currency gain or loss for U.S. federal income tax purposes.

Redemption of some or all of a U.S. Shareholder’s Shares in exchange for the underlying Japanese Yen represented by the Shares redeemed generally will not be a taxable event to the Shareholder. The Shareholder’s tax basis for the Japanese Yen received in the redemption generally will be the same as the Shareholder’s tax basis for the portion of its pro rata share of the Japanese Yen held in the Trust immediately prior to the redemption that is attributable to the Shares redeemed. In determining the portion of the U.S. Shareholder’s total tax basis in the Japanese Yen held in the Trust that is attributable to the Shares redeemed, the U.S. Shareholder generally will be required to use the method, if any, that it has used previously to determine the tax basis of nonfunctional currency amounts withdrawn from accounts with a bank or other financial institution. A subsequent sale of the Japanese Yen received by the Shareholder will be a taxable event.

U.S. Shareholders that hold multiple lots of Shares, or that are contemplating acquiring multiple lots of Shares, are urged to consult their own tax advisers as to the determination of the tax basis for the underlying Japanese Yen related to such Shares.

In the case of a U.S. Shareholder that uses the U.S. dollar as its functional currency, any gain or loss recognized by such U.S. Shareholder upon the sale of Shares, or upon the sale of Japanese Yen by the Trust, generally will be treated under Internal Revenue Code section 988 as ordinary income or loss for U.S. federal income tax purposes. The share of any interest income earned by the Trust that is allocable to a U.S. Shareholder will be treated as ordinary income for U.S. federal income tax purposes.

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BROKERAGE FEES AND TRUST EXPENSES

Any brokerage or other transaction fee incurred by a Shareholder in purchasing Shares will be treated as part of the Shareholder’s tax basis in the underlying assets of the Trust. Similarly, any brokerage fee incurred by a Shareholder in selling Shares will reduce the amount realized by the Shareholder with respect to the sale.

Shareholders will be required to recognize gain or loss upon a sale of Japanese Yen by the Trust (as discussed above), even though some or all of the proceeds of such sale are used by the Trustee to pay Trust expenses. Shareholders may deduct their respective pro rata shares of each expense incurred by the Trust to the same extent as if they directly incurred the expense. Shareholders who are individuals, estates or trusts, however, may be required to treat some or all of the expenses of the Trust as miscellaneous itemized deductions. Individuals may deduct certain miscellaneous itemized deductions only to the extent they exceed 2% of adjusted gross income. In addition, such deductions may be subject to phase-outs and other limitations under applicable provisions of the Internal Revenue Code.

INVESTMENT BY REGULATED INVESTMENT COMPANIES

Mutual funds and other investment vehicles which are “regulated investment companies” within the meaning of Internal Revenue Code section 851 should consult with their tax advisors concerning (1) the likelihood that an investment in Shares, although they are a “security” within the meaning of the Investment Company Act of 1940, may be considered an investment in the underlying Japanese Yen for purposes of Internal Revenue Code section 851(b) and (2) the extent to which an investment in Shares might nevertheless be consistent with preservation of the qualification of such vehicles under Internal Revenue Code section 851.

UNITED STATES INFORMATION REPORTING AND BACKUP WITHHOLDING FOR U.S. AND NON-U.S. SHAREHOLDERS

The Trustee will file certain information returns with the IRS, and provide certain tax-related information to Shareholders, in connection with the Trust. Proposed regulations, if finalized in their current form, would require that each Shareholder be provided with information regarding its allocable portion of the Trust’s annual income (if any) and expenses, and sales of Trust assets, including, in the case of a sale of Japanese Yen, the amount of proceeds attributable to each Share. Each Shareholder, however, would be required to determine for itself the amount of gain or loss recognized with respect to such sales.

A U.S. Shareholder may be subject to U.S. backup withholding tax in certain circumstances unless it provides its taxpayer identification number and complies with certain certification procedures. A Non-U.S. Shareholder may have to comply with certification procedures to establish that the Shareholder is not a U.S. person in order to avoid the information reporting and backup withholding tax requirements.

The amount of any backup withholding will be allowed as a credit against a Shareholder’s U.S. federal income tax liability and may entitle such a Shareholder to a refund, provided that the required information is furnished to the IRS.

INCOME TAXATION OF NON-U.S. SHAREHOLDERS

The Trust does not expect to generate taxable income except for gain (if any) upon the sale of Japanese Yen and interest income. A Non-U.S. Shareholder generally will not be subject to U.S. federal income tax with respect to gain recognized upon the sale or other disposition of Shares, or upon the sale of Japanese Yen by the Trust, unless: (1) the Non-U.S. Shareholder is an individual and is present in the United States for 183 days or more during the taxable year of the sale or other disposition, and the gain is treated as being from United States sources; or (2) the gain is effectively connected with the conduct by the Non-U.S. Shareholder of a trade or business in the United States.

A Non-U.S. Shareholder’s share of any interest income earned by the Trust generally will not be subject to U.S. federal income tax unless the Shares owned by such Non-U.S. Shareholder are effectively connected with the conduct by the Non-U.S. Shareholder of a trade or business in the United States.

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ESTATE AND GIFT TAX CONSIDERATIONS FOR NON-U.S. SHAREHOLDERS

An individual who is neither a citizen nor a resident (as specially defined for U.S. federal estate and gift tax purposes) of the United States is generally subject to U.S. estate tax on all property that has a U.S. “situs.” An individual who is neither a citizen nor a resident (as specially defined for U.S. federal estate and gift tax purposes) of the United States is generally subject to U.S. federal gift tax on gifts of tangible personal property or real property having a U.S. situs. In addition, the U.S. federal “generation-skipping transfer tax” may apply in certain circumstances if an individual who is neither a citizen nor a resident (as specially defined for U.S. federal estate and gift tax purposes) of the United States makes a transfer of property that has a U.S. situs. Neither the Shares nor the Japanese Yen underlying the Shares should be considered to have a U.S. situs for purposes of the U.S. federal estate tax, gift tax, and generation-skipping transfer tax.

Shareholders are urged to consult their tax advisers regarding the possible application of U.S. federal estate, gift, and generation-skipping transfer taxes in their particular circumstances.

TAXATION IN JURISDICTIONS OTHER THAN THE UNITED STATES

Prospective purchasers of Shares that are based in or acting out of a jurisdiction other than the United States are advised to consult their own tax advisers as to the tax consequences, under the laws of such jurisdiction (or any other jurisdiction not being the United States to which they are subject), of their purchase, holding, sale and redemption of or any other dealing in Shares and, in particular, as to whether any value added tax, other consumption tax or transfer tax is payable in relation to such purchase, holding, sale, redemption or other dealing.

ERISA and Related Considerations

The fiduciary investment rules of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) generally apply to private employee benefit plans and to certain investment funds in which such plans participate (“ERISA Investors”). These rules are generally not applicable to individual retirement arrangements (“IRAs”), plans covering only self-employed individuals, governmental plans, church plans or foreign plans (“Non-ERISA Investors”). Consequently, much of the following discussion of the fiduciary issues arising under ERISA is generally not applicable to such investors. Non-ERISA Investors may be subject to various other fiduciary requirements under state law or other applicable law, however, which they should consider before investing in the Shares.

ERISA Investors, as well as IRAs and plans covering only self-employed individuals, are generally subject to the prohibited transaction rules of Section 4975 of the Internal Revenue Code and Section 302 of ERISA.

FIDUCIARY ISSUES

A fiduciary of an ERISA Investor should consider its fiduciary responsibilities under ERISA before investing in the Shares. These duties require the fiduciary to act solely in the interests of the ERISA plan’s participants and beneficiaries. These duties also obligate the fiduciary to consider the appropriateness of any one given investment in light of the ERISA plan’s entire portfolio.

Before investing in the Shares, fiduciaries of ERISA Investors should review and determine (1) ERISA’s fiduciary standards, (2) whether an investment in the Shares would be consistent with ERISA’s prudence and diversification requirements, including consideration of the “Risk Factors” disclosed elsewhere in this prospectus, (3) whether such an investment would constitute a direct or indirect non-exempt prohibited transaction and (4) whether the fiduciaries have the appropriate authority to make the investment under the governing ERISA plan documents and investment policies, as well as under Title I of ERISA.

Fiduciaries of ERISA Investors should also consider prohibitions in ERISA and in the Internal Revenue Code relating to an ERISA Investor engaging in certain transactions involving “plan assets” with persons who are “parties in interest” under ERISA or “disqualified persons” under the Internal Revenue Code

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with respect to such plan. As noted above, the prohibited transaction provisions of the Internal Revenue Code also apply to some Non-ERISA Investors and such investors also should consider these provisions prior to investing in the Shares. These prohibited transaction rules are complex and may prohibit an investment in the Shares by certain ERISA Investors and Non-ERISA Investors.

ERISA Investors may currently maintain relationships with the Trustee, Sponsor or Depository or their principals or affiliates. Such entities may be deemed parties in interest with respect to an ERISA Investor. ERISA prohibits the use of plan assets for the benefit of a party in interest and also prohibits a fiduciary with respect to an ERISA Investor from using its position to cause an ERISA Investor to make an investment from which it or certain third parties related to the fiduciary would receive a fee or other consideration. Similar provisions are imposed by the Internal Revenue Code with respect to IRAs and retirement plans covering only self employed individuals. In certain cases, exemptions apply with respect to certain transactions that might otherwise be prohibited by ERISA.

Each ERISA Investor should consult with its counsel to determine whether investment in the Shares may be prohibited by ERISA or otherwise would violate ERISA.

Each IRA Non-ERISA Investor should consult with its counsel to determine whether investment in the Shares may be prohibited by the Internal Revenue Code.

PLAN ASSET ISSUES

It is anticipated that the Shares will constitute “publicly offered securities” as defined in Section 2510.3-101(b)(2) of the U.S. Department of Labor regulations. Accordingly, Shares purchased by an ERISA Investor will constitute Plan Assets, but the assets of the Trust will not be considered “plan assets” for purposes of ERISA.

Plan of Distribution

In addition to, and independent of, the Sponsor’s purchase and redemption of one Share and the Initial Purchaser’s purchase of three Baskets described below, the Trust issues Shares in Baskets to Authorized Participants in exchange for deposits of the amount of Japanese Yen represented by the Baskets being created on a continuous basis. Because new Shares are created and issued on an ongoing basis, throughout the life of the Trust a “distribution” (as such term is used in the Securities Act) will be occurring. Authorized Participants, other broker-dealers and other persons are cautioned that some of their activities will result in their being deemed participants in a distribution in a manner that would render them statutory underwriters and will subject them to the prospectus-delivery and liability provisions of the Securities Act. For example, an Authorized Participant, other broker-dealer firm or its client will be deemed a statutory underwriter if it purchases a Basket from the Trust, breaks the Basket down into the constituent Shares and sells the Shares to its customers; or if it chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary market demand for the Shares. When an Authorized Participant acts as an underwriter, it will be subject to the prospectus delivery requirements with respect to the customers purchasing shares from it. A determination of whether one is an underwriter must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that would lead to categorization as an underwriter.

A Shareholder who buys or sells Shares from, to, or through a broker-dealer should expect to be charged a commission by the broker-dealer for effecting the transaction. Investors are encouraged to review the terms of their brokerage accounts for details on applicable commissions or charges.

Dealers who are neither Authorized Participants nor “underwriters” but are nonetheless participating in a distribution (as contrasted to ordinary secondary trading transactions), and thus dealing with Shares that are part of an “unsold allotment” within the meaning of section 4(3)(C) of the Securities Act, would be unable to take advantage of the prospectus-delivery exemption provided by section 4(3) of the Securities Act and therefore will be subject to the prospectus delivery requirements with respect to their clients who purchase Shares from them.

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The Distributor is assisting the Sponsor in developing a marketing plan for the Trust, preparing marketing materials regarding the Shares, including the content of the Trust’s website, executing the marketing plan for the Trust and providing strategic and tactical research on the foreign exchange markets, in each case in compliance with applicable laws and regulations.

On [                    ], 200    , the Sponsor deposited 10,000 Japanese Yen into the primary deposit account of the Trust in exchange for one Share. That same day the Trustee recorded the Share as owned by the Sponsor. The Sponsor purchased the Share solely for the purpose of forming the Trust and the Sponsor will redeem the Share for 10,000 Japanese Yen immediately after the SEC declares effective the registration statement. In order to provide liquidity at the commencement of trading of the Shares, the Initial Purchaser will deposit 1.5 billion Japanese Yen in the primary deposit account of the Trust and the Trustee will instruct DTC to record, and DTC will record, three Baskets totaling 150,000 Shares (constituting 10,000 Japanese Yen per Share) as owned by the Initial Purchaser.

The Initial Purchaser intends to offer to the public these 150,000 Shares at a per-Share offering price that will vary depending on, among other factors, the price of the Shares on the NYSE at the time of the offer. Shares offered by the Initial Purchaser at different times may have different offering prices. The Initial Purchaser will not receive from the Trust, the Sponsor, the Distributor or any of their affiliates any fee or other compensation in connection with the sale of the Shares.

Note to Secondary Market Investors: The Shares can be purchased or redeemed directly from the Trust only in Creation Baskets or Redemption Baskets, respectively. Each Creation Basket and Redemption Basket consists of 50,000 Shares and is expected to be worth several million dollars. Most individual investors, therefore, will not be able to purchase or redeem Shares directly from the Trust. Some of the information contained in this prospectus, including information about buying and selling Shares directly from and to the Trust, is not relevant to most investors. The Shares will be listed and traded on the NYSE and may be purchased and sold in lots of Shares. Individuals interested in purchasing Shares in the secondary market should contact their broker-dealers. Shares purchased or sold through a broker-dealer can be expected to carry a mark-up, mark-down or commission.

Legal Proceedings

There are no legal proceedings against the Sponsor or the Trust and no legal proceedings against the Trustee or the Depository relating to the operation of the Trust or the offering of the Shares.

Legal Matters

The validity of the Shares will be passed upon for the Sponsor by Foley & Lardner LLP, who, as special United States tax counsel to the Trust, also will render an opinion regarding the material federal income tax consequences relating to the Shares. In addition to receiving customary legal fees, Foley & Lardner LLP will be paid an annual fee for the life of the Trust, which will be borne by M7 Ventures, LLC and based on the NAV of the Trust, for its assistance in developing the structure of the Trust and this offering.

License

Without conceding that the operation of the Trust or the marketing of or trading in the Shares would infringe any intellectual property owned by BNY, an affiliate of the Sponsor has entered into a License Agreement with BNY granting the Sponsor’s affiliate a non-exclusive, personal and non-transferable license under BNY’s patent application(s) covering systems and methods for securitizing a commodity. The license grant is limited to only allow the Sponsor’s affiliate to establish, operate and market a currency-based securities product based solely on the securitization, in whole or in part, of a single non-U.S. currency. The Sponsor’s affiliate has the right to sublicense affiliates, partners, co-sponsors, joint ventures, trustees, depositaries and agents, but the license cannot be transferred without BNY’s prior written consent. The Sponsor’s affiliate has sublicensed the license to the Sponsor. As consideration for the license, BNY has been appointed as trustee of the Trust. If BNY is terminated as trustee of the Trust it will be paid an annual royalty fee. Any royalty fee incurred will be an expense

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payable by the Sponsor under the Depositary Trust Agreement. The Sponsor has also agreed to not initiate, directly or indirectly, any legal action against BNY for BNY’s or any of BNY’s affiliates’ use of any improvement, enhancement, modification, derivative work or upgrade made by the Sponsor to the rights sublicensed to it.

Experts

The Statement of Financial Condition as of [                    ], 200     included in this prospectus has been so included in reliance on the report of [                    ], an independent registered public accounting firm, given on the authority of said firm as experts in accounting and auditing.

Where You Can Find More Information

The Sponsor has filed on behalf of the Trust a registration statement on Form S-1 with the SEC under the Securities Act. This prospectus does not contain all of the information set forth in the registration statement (including the exhibits to the registration statement), parts of which have been omitted in accordance with the rules and regulations of the SEC. For further information about the Trust or the Shares, please refer to the registration statement, which you may inspect, without charge, at the public reference facilities of the SEC at the below address or online at www.sec.gov, or obtain at prescribed rates from the public reference facilities of the SEC at the below address. Information about the Trust and the Shares also can be obtained from the Trust’s website. The internet address of the Trust’s website is www.currencyshares.com. This internet address is only provided here as a convenience to you to allow you to access the Trust’s website. The information contained on or connected to the Trust’s website is not part of this prospectus or the registration statement of which this prospectus is part.

The Trust is subject to the informational requirements of the Securities Exchange Act. The Sponsor, on behalf of the Trust, will file quarterly and annual reports and other information with the SEC. The Sponsor will file an updated prospectus annually for the Trust pursuant to the Securities Act. The reports and other information can be inspected at the public reference facilities of the SEC located at 100 F Street, N.E., Washington, D.C. 20549-4561 and online at www.sec.gov. You also may obtain copies of such material from the public reference facilities of the SEC at 100 F Street, N.E., Washington, D.C. 20549-4561, at prescribed rates. You may obtain more information concerning the operation of the public reference facilities of the SEC by calling the SEC at 1-800-SEC-0330 or visiting online at www.sec.gov.

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Index to Financial Statements

Item	Page
Form of Report of Independent Registered Public Accounting Firm	F-2
Form of Statement of Financial Condition	F-3
Notes to Financial Statement	F-4

F-1

Form of Report of Independent Registered Public Accounting Firm

As of the date of this filing, the Trust has not been formed. The Sponsor will file a Report of Independent Registered Public Accounting Firm by pre-effective amendment to this Form S-1 substantially in the form set forth below.

To the Sponsor and Shareholder

    of CurrencyShares Japanese Yen Trust:

In our opinion, the accompanying statement of financial condition presents fairly, in all material respects, the financial position of CurrencyShares Japanese Yen Trust (the “Trust”) at [                    ], 200    , in conformity with accounting principles generally accepted in the United States of America. This financial statement is the responsibility of the management of Rydex Specialized Products LLC d/b/a Rydex Investments (the “Sponsor”). Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of financial condition is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of financial condition, assessing the accounting principles used and significant estimates made by the Sponsor’s management, and evaluating the overall statement of financial condition presentation. We believe that our audit of the statement of financial condition provides a reasonable basis for our opinion.

                    , 200    

F-2

CurrencyShares^SM Japanese Yen Trust

Form of Statement of Financial Condition

As of the date of this filing, the Trust has not been formed. The Sponsor will file a Statement of Financial Condition, including Notes to Financial Statement, by pre-effective amendment to this Form S-1 substantially in the form set forth below.

[                    ], 200    

Assets
Current Assets
Japanese Yen Deposits (cash)	$
Total Assets	$
Liabilities and Shareholders’ Equity
Current Liabilities
Commitments and Contingent Liabilities (Note 7)	$	—
Redeemable Capital Shares, at redemption value, no par value, 150,000 authorized — 1 issued and outstanding	$
Total Liabilities and Shareholders’ Equity	$

See Notes to Financial Statement.

F-3

Notes to Financial Statement

1. Organization and Description of the Trust

The CurrencyShares Japanese Yen Trust (the “Trust”) was formed under the laws of New York on [                    ], 200   when the Sponsor deposited 10,000 Japanese Yen in the Trust’s primary deposit account held by JPMorgan Chase Bank, N.A., London Branch (the “Depository”). The sponsor is Rydex Specialized Products LLC d/b/a “Rydex Investments” (the “Sponsor”), a Delaware limited liability company whose sole member is PADCO Advisors II, Inc. (also d/b/a/ “Rydex Investments”). The Sponsor is responsible for, among other things, overseeing the performance of the Trustee and the Trust’s principal service providers, including the preparation of financial statements. The trustee, The Bank of New York (the “Trustee”), is responsible for the day-to-day administration of the Trust.

The investment objective of the Trust is for the Trust’s shares (the “Shares”) to reflect the price in USD of the Japanese Yen. The Trust’s assets consist only of Japanese Yen on demand deposit in two deposit accounts maintained by JPMorgan Chase Bank, N.A., London Branch: a primary deposit account which earns interest and a secondary deposit account which does not earn interest. The secondary deposit account is only used in connection with mid-month creations and redemptions of Baskets (blocks of 50,000 Shares), to account for interest that has been earned on the primary deposit account during the month but not yet paid and to receive interest earned on the primary deposit account, pay Trust expenses and distribute any excess interest to Shareholders on a monthly basis. The Trust offers a vehicle for investors to own and trade Japanese Yen based on a share-certificate format.

In addition to the 10,000 Japanese Yen deposited by the Sponsor, [                    ] will deposit 1.5 billion Japanese Yen in the primary deposit account of the Trust once the Trust’s registration statement is declared effective.

2. Significant Accounting Policies

A. Japanese Yen Deposits

Japanese Yen Deposits consists of a Japanese Yen-denominated, interest-bearing demand account and a Japanese Yen-denominated, non-interest-bearing account.

B. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates.

C. Foreign Currency Translation

The Trustee will calculate the Trust’s NAV each business day, as described in Note 3 below. For NAV calculation purposes, Japanese Yen Deposits (cash) are translated at the Noon Buying Rate, which is the Japanese Yen/U.S. dollar (“USD”) exchange rate as determined and published by the Federal Reserve Bank of New York as of 12:00 PM (New York time) on each day that the NYSE is open for regular trading.

The functional currency of the Trust is the Japanese Yen in accordance with Financial Accounting Standard (“FAS”) 52, Foreign Currency Translation. For financial statement reporting purposes, the USD is the reporting currency. As a result, the financial statements are translated from Japanese Yen to USD. Any currency translation adjustment is included in Comprehensive Income.

D. Federal Income Taxes

The Trust is treated as a “grantor trust” for federal income tax purposes and, therefore, no provision for federal income taxes is required. Interest, gains and losses are “passed through” to the holders of Shares of the Trust.

Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro-rata share of the assets held in the Trust. Shareholders also will be treated as if they directly received

F-4

their respective pro-rata shares of the Trust’s income, if any, and as if they directly incurred their respective pro-rata shares of the Trust’s expenses. The acquisition of Shares by a U.S. Shareholder as part of a creation of a Basket will not be a taxable event to the Shareholder.

The Sponsor’s fee accrues daily and is payable monthly. For U.S. federal income tax purposes, an accrual-basis U.S. Shareholder generally will be required to take into account as an expense its allocable share of the USD-equivalent of the amount of the Sponsor’s fee that is accrued on each day, with such USD-equivalent being determined by the currency exchange rate that is in effect on the respective day. To the extent that the currency exchange rate on the date of payment of the accrued amount of the Sponsor’s fee differs from the currency exchange rate in effect on the day of accrual, the U.S. Shareholder will recognize a currency gain or loss for U.S. federal income tax purposes.

The Trust does not expect to generate taxable income except for gain (if any) upon the sale of Japanese Yen and interest income. A Non-U.S. Shareholder generally will not be subject to U.S. federal income tax with respect to gain recognized upon the sale or other disposition of Shares, or upon the sale of Japanese Yen by the Trust, unless: (1) the Non-U.S. Shareholder is an individual and is present in the United States for 183 days or more during the taxable year of the sale or other disposition, and the gain is treated as being from United States sources; or (2) the gain is effectively connected with the conduct by the Non-U.S. Shareholder of a trade or business in the United States.

A Non-U.S. Shareholder’s share of any interest income earned by the Trust generally will not be subject to U.S. federal income tax unless the Shares owned by such Non-U.S. Shareholder are effectively connected with the conduct by the Non-U.S. Shareholder of a trade or business in the United States.

E. Revenue Recognition

Interest on the primary deposit account accrues and is recorded daily as earned and is received on a monthly basis.

F. Dividends

To the extent that the interest earned by the Trust exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, the Trust will distribute, as a dividend, the excess interest earned in Japanese Yen. The Trustee will direct that the excess Japanese Yen be converted into USD at a prevailing market rate and the Trustee will distribute the USD as promptly as practicable to Shareholders on a pro rata basis (in accordance with the number of Shares that they own).

3. Redeemable Capital Shares

Shares are classified as “redeemable” for financial statement purposes, since they are subject to redemption. Shares are issued and redeemed continuously in Baskets of 50,000 Shares in exchange for Japanese Yen. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. Authorized Participants, as defined below, are the only persons that may place orders to create and redeem Baskets. An Authorized Participant is a DTC participant that is a registered broker-dealer or other institution eligible to settle securities transactions though the book-entry facilities of the DTC and which has entered into a contractual arrangement with the Trust and the Sponsor governing, among other matters, the creation and redemption process. Authorized Participants may redeem their Shares at any time in the prescribed aggregations of 50,000 Share Baskets.

Due to expected continuing sales and redemption of capital stock and the three-day period for settlement of the Shares, the Trust reflects Shares sold as a receivable, rather than a contra equity, on the trade date. Shares redeemed are reflected as a liability on the trade date. Outstanding Shares are reflected at redemption value, which is the net asset value per Share at the period end date. Adjustments to present redeemable capital shares at redemption value are recorded against retained earnings or, in the absence of retained earnings, by charges against the cumulative translation adjustment.

The Trustee will calculate the Trust’s NAV each business day. To calculate the NAV, the Trustee will subtract the Sponsor’s accrued fee through the previous day from the Japanese Yen held by the Trust (including all unpaid interest accrued through the preceding day) and calculate the value of the Japanese

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Yen in U.S. dollars based upon the Noon Buying Rate. If, on a particular evaluation day, the Noon Buying Rate has not been determined and announced by 2:00 PM (New York time), then the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate shall be used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for such valuation. In the event that the Trustee and the Sponsor determine that the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate is not an appropriate basis for valuation of the Trust’s Japanese Yen, they shall determine an alternative basis for such evaluation to be employed by the Trustee. The Trustee also determines the NAV per Share, which equals the NAV of the Trust divided by the number of outstanding Shares. Shares deliverable under a purchase order are considered outstanding for purposes of determining NAV per Share; Shares deliverable under a redemption order are not considered outstanding for this purpose.

4. Sponsor’s Fee

The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Japanese Yen in the Trust (including all unpaid interest but excluding unpaid fees, each as accrued through the immediately preceding day) and is paid monthly.

The Sponsor assumes and pays the following administrative and marketing expenses incurred by the Trust: the Trustee’s monthly fee, NYSE listing fees, SEC registration fees, typical maintenance and transaction fees of the Depository, printing and mailing costs, audit fees and expenses, up to $100,000 per year in legal fees and expenses, and applicable license fees. The Sponsor has also paid the costs of the Trust’s organization and the initial sales of the Shares, which were approximately $[                    ] when the Trust was formed.

In certain exceptional cases the Trust will pay for some expenses in addition to the Sponsor’s fee. These exceptions include expenses not assumed by the Sponsor (i.e., expenses identified in the preceding paragraph), taxes and governmental charges, expenses and costs of any extraordinary services performed by the Trustee or the Sponsor on behalf of the Trust or action taken by the Trustee or the Sponsor to protect the Trust or the interests of Shareholders, indemnification of the Sponsor under the Depositary Trust Agreement, audit fees, and legal expenses in excess of $100,000 per year.

5. Related Parties

The Sponsor is a related party of the Trust. The Sponsor oversees the performance of the Trustee and the Trust’s principal service providers, including the preparation of financial statements, but does not exercise day-to-day oversight over the Trustee or the Trust’s service providers. The Sponsor has also paid the costs of the Trust’s organization and the initial sales of the Shares, as described in Note 4.

6. Concentration Risk

All of the Trust’s assets are holdings of Japanese Yen, which creates a concentration risk associated with fluctuations in the price of Japanese Yen. Accordingly, a decline in the price of Japanese Yen will have an adverse effect on the value of the Shares of the Trust. Factors that may have the effect of causing a decline in the price of the Japanese Yen include national debt levels and trade deficits, domestic and foreign inflation rates, domestic and foreign interest rates, investment and trading activities of institutions and global or regional political, economic or financial events and situations. Substantial sales of Japanese Yen by the official sector (central banks, other governmental agencies and related institutions that buy, sell and hold Japanese Yen as part of their reserve assets) could adversely affect an investment in the Shares.

7. Commitments and Contingencies

Under the Trust’s organizational documents, the Sponsor is indemnified against any liability or expense it incurs without negligence, bad faith or willful misconduct on its part. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

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PART II — INFORMATION NOT REQUIRED IN PROSPECTUS

TABLE OF CONTENTS

Item 13. Other Expenses of Issuance and Distribution.

The expenses expected to be incurred in connection with the issuance and distribution of the securities being registered are as set forth below. Except for the SEC registration fee, all such expenses are estimated.

SEC Registration Fee	$	1,359
Printing and Engraving Expenses		20,000
Legal Fees and Expenses (1)		100,000
Insurance		10,000
Accounting		45,000
Miscellaneous		3,641
Total	$	180,000

(1) Excludes the additional fee of Foley & Lardner LLP based on the NAV of the Trust.

Item 14. Indemnification of Directors and Officers.

The Sponsor is a limited liability company formed as such under Delaware law. Section 18-108 of the Delaware Limited Liability Company Act provides that a limited liability company may indemnify and hold harmless any members, managers or other persons against any and all claims and demands whatsoever, subject to any standards and restrictions set forth in the limited liability company agreement of the limited liability company.

Section 18 of the Sponsor’s Limited Liability Company Agreement provides that, to the fullest extent permitted by applicable law, a member or officer of the Sponsor will be entitled to indemnification from the Sponsor for any loss, damage or claim incurred by the member or officer for any act or omission performed or omitted by the member or officer in good faith on behalf of the Sponsor and in a manner reasonably believed to be within the scope of the authority conferred on the member or officer by the Sponsor’s Limited Liability Company Agreement; provided, however, that no member or officer will be entitled to be indemnified if the loss, damage or claim was due to the member’s or officer’s fraud or willful misconduct. A member’s or officer’s reasonably incurred costs and expenses in defending pending or threatened actions, suits or proceedings will be paid in advance by the Sponsor if the member or officer provides an undertaking to repay the amounts advanced if it is ultimately determined that the member or officer is not entitled to be indemnified by the Sponsor. The indemnity and the advance of expenses are limited to the Sponsor’s assets, and no member of the Sponsor will have personal liability for such indemnity.

Section 7.1(d) of the Depositary Trust Agreement provides that the Sponsor and its directors, Shareholders, officers, employees, affiliates and subsidiaries will be indemnified from the Trust and held harmless against any loss, liability or expense incurred by an indemnified party without (1) negligence, bad faith, willful misconduct or willful malfeasance on the part of the indemnified party arising out of or in connection with the performance of its obligations under the Depositary Trust Agreement or any actions taken in accordance with the provisions of the Depositary Trust Agreement or (2) the indemnified party’s reckless disregard of its obligations and duties under the Depositary Trust Agreement. The indemnity will include payment from the Trust of the indemnified party’s costs and expenses of defending itself against any claim or liability based on its capacity as Sponsor under the Depositary Trust Agreement.

Item 15. Recent Sales of Unregistered Securities.

Not applicable.

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Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits

Exhibit Number	Description
3.1	Certificate of Formation of Rydex Specialized Products LLC*
3.2	Limited Liability Company Agreement of Rydex Specialized Products LLC*
4.1	Form of Depositary Trust Agreement
4.2	Form of Participant Agreement
5.1	Opinion of Foley & Lardner LLP as to legality**
8.1	Opinion of Foley & Lardner LLP as to tax matters**
10.1	Form of Deposit Account Agreement
10.2	Form of Sublicense Agreement
23.1	Consent of Independent Registered Public Accounting Firm**
23.2	Consents of Foley & Lardner LLP (included in Exhibits 5.1 and 8.1)**
24.1	Power of Attorney*

 * Previously filed

 ** To be filed by amendment.

(b) Financial Statement Schedules

Not applicable.

Item 17. Undertakings.

The undersigned Registrant hereby undertakes:

(1)       To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)       That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)       To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

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(4)       That insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(5)       That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i)      If the registrant is relying on Rule 430B (Section 230.430B of this chapter):

A. Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

B. Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

(ii)      If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(6)       That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned

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registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)        Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)      Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)    The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)     Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(7)       That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(8)       That, for purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Rockville, State of Maryland, on January 5, 2007.

CURRENCYSHARES JAPANESE YEN TRUST
By	Rydex Specialized Products LLC
	Sponsor of the CurrencyShares Japanese Yen Trust
	By:	/s/    CARL G. VERBONCOEUR
		Carl G. Verboncoeur
		CEO and Treasurer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/    CARL G. VERBONCOEUR       Carl G. Verboncoeur	Director, CEO and Treasurer (principal executive officer)	January 5, 2007
/s/    NICK BONOS         Nick Bonos	Director and CFO (principal financial officer and principal accounting officer)	January 5, 2007
/s/    MICHAEL BYRUM         Michael Byrum	Director and Secretary	January 5, 2007

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Exhibit Index

Exhibit Number	Description
3.1	Certificate of Formation of Rydex Specialized Products LLC*
3.2	Limited Liability Company Agreement of Rydex Specialized Products LLC*
4.1	Form of Depositary Trust Agreement
4.2	Form of Participant Agreement
5.1	Form of Opinion of Foley & Lardner LLP as to legality**
8.1	Form of Opinion of Foley & Lardner LLP as to tax matters**
10.1	Form of Deposit Account Agreement
10.2	Form of Sublicense Agreement
23.1	Consent of Independent Registered Public Accounting Firm**
23.2	Consents of Foley & Lardner LLP (included in Exhibits 5.1 and 8.1)**
24.1	Power of Attorney*

* Previously filed.

** To be filed by amendment.

EX-4.1

Exhibit 4.1

RYDEX SPECIALIZED PRODUCTS LLC, d/b/a “RYDEX INVESTMENTS”,

as Sponsor,

THE BANK OF NEW YORK,

as Trustee,

ALL REGISTERED OWNERS AND BENEFICIAL OWNERS OF JAPANESE YEN

SHARES ISSUED HEREUNDER

and

ALL DEPOSITORS

Depositary Trust Agreement

CurrencyShares^SM Japanese Yen Trust

Dated as of [            ], 200__

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS AND RULES OF CONSTRUCTION	2
Section 1.1	Definitions	2
Section 1.2	Rules of Construction	8
ARTICLE 2	STATEMENT OF PURPOSE; CREATION AND DECLARATION OF TRUST; FORM OF CERTIFICATES; DEPOSIT OF JAPANESE YEN; DELIVERY, REGISTRATION OF TRANSFER AND SURRENDER OF SHARES	9
Section 2.1	Statement of Purpose; Duties and Powers of the Trust	9
Section 2.2	Creation and Declaration of Trust; Business of the Trust	9
Section 2.3	Form of Certificates; Book-Entry System; Transferability of Shares	10
Section 2.4	Deposit of Japanese Yen	12
Section 2.5	Delivery of Shares	14
Section 2.6	Registration and Registration of Transfer of Shares; Combination and Split-up of Certificates	14
Section 2.7	Surrender of Shares and Withdrawal of Trust Property	15
Section 2.8	Limitations on Delivery, Registration of Transfer and Surrender of Shares	16
Section 2.9	Lost Certificates, Etc.	17
Section 2.10	Cancellation and Destruction of Surrendered Certificates	17
Section 2.11	Splits and Reverse Splits of Shares	18
ARTICLE 3	CERTAIN OBLIGATIONS OF REGISTERED OWNERS OF SHARES	18
Section 3.1	Liability of Registered Owner for Taxes and Other Governmental Charges	18
Section 3.2	Warranties on Deposit of Japanese Yen	19
ARTICLE 4	ADMINISTRATION OF THE TRUST	19
Section 4.1	Evaluation of Japanese Yen; Calculation of Net Asset Value	19
Section 4.2	Responsibility of the Trustee for Evaluations	20
Section 4.3	Interest Account and Non-Interest Account	21
Section 4.4	Cash Distributions	21
Section 4.5	Distributions of Surplus Property	22
Section 4.6	Fixing of Record Date	22
Section 4.7	Payment of Trust Expenses	22
Section 4.8	Statements and Reports	24

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Section 4.9	Further Provisions for Sales of Trust Property; Currency Conversion	24
Section 4.10	Counsel	26
Section 4.11	Grantor Trust	26
ARTICLE 5	THE SPONSOR	27
Section 5.1	Duties of the Sponsor	27
Section 5.2	Obligations of the Sponsor	27
Section 5.3	Prevention or Delay in Performance by the Sponsor	28
Section 5.4	Certain Matters Regarding Successor Sponsor	29
Section 5.5	Resignation of Sponsor; Successors	29
Section 5.6	Compensation of the Sponsor	30
Section 5.7	Federal Securities Law Filings	31
Section 5.8	Discretionary Actions by Sponsor; Consultation	32
ARTICLE 6	THE TRUSTEE	32
Section 6.1	Maintenance of Office and Transfer Books by the Trustee	32
Section 6.2	Obligations of the Trustee	33
Section 6.3	Prevention or Delay in Performance by the Trustee	34
Section 6.4	Resignation or Removal of the Trustee; Appointment of Successor Trustee	34
Section 6.5	Transfers Between Interest Account and Non-Interest Account	36
Section 6.6	The Depository	37
Section 6.7	Compensation of the Trustee	37
Section 6.8	Retention of Trust Documents	38
Section 6.9	Prospectus Delivery	38
Section 6.10	Discretionary Actions by Trustee; Consultation	38
ARTICLE 7	INDEMNIFICATION	39
Section 7.1	Indemnification of the Sponsor and Trustee	39
ARTICLE 8	AMENDMENT AND TERMINATION	42
Section 8.1	Amendment	42
Section 8.2	Termination	43
ARTICLE 9	MISCELLANEOUS	46
Section 9.1	Counterparts	46
Section 9.2	Third-Party Beneficiaries	46
Section 9.3	Severability	47
Section 9.4	Registered Owners, Beneficial Owners and Depositors as Parties; Binding Effect	47
Section 9.5	Notices	47
Section 9.6	Agent for Service; Submission to Jurisdiction	48
Section 9.7	Governing Law	49

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EXHIBIT A – DEPOSIT ACCOUNT AGREEMENT

EXHIBIT B – FORM OF CERTIFICATES

iii

DEPOSITARY TRUST AGREEMENT

THIS DEPOSITARY TRUST AGREEMENT dated as of [            ], 200__, between Rydex Specialized Products LLC, a Delaware limited liability company d/b/a “RYDEX INVESTMENTS”, as sponsor, THE BANK OF NEW YORK, a New York banking corporation, as trustee, all Registered Owners and Beneficial Owners from time to time of Japanese Yen Shares issued hereunder and all Depositors.

WITNESSETH:

WHEREAS the Sponsor desires to establish a trust, to be known as the “CurrencyShares^SM Japanese Yen Trust”, pursuant to the laws of the State of New York;

WHEREAS the Sponsor desires to establish the terms on which Japanese Yen (as herein defined) may be deposited in the trust and provide for the creation of Japanese Yen Shares in Baskets (as herein defined) representing fractional undivided interests in the net assets of the trust and the execution and delivery of Certificates (as herein defined) evidencing the Japanese Yen Shares; and

WHEREAS the Sponsor desires to provide for other terms and conditions upon which the trust shall be established and administered, as hereinafter provided.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the Sponsor and the Trustee hereby agree as follows:

ARTICLE 1

DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.1 Definitions.

Except as otherwise specified in this Trust Agreement or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Depositary Trust Agreement.

“Agreement” means this Depositary Trust Agreement, as amended or supplemented in accordance with its terms.

“Authorized Participant” means a Person that, at the time of submitting a Purchase Order or a Redemption Order, (i) is a registered broker-dealer or other securities market participant, (ii) is a DTC Participant or an Indirect Participant and (iii) has in effect a valid Authorized Participant Agreement.

“Authorized Participant Agreement” means an agreement among the Trustee, the Sponsor and an Authorized Participant that authorizes the Authorized Participant to submit Purchase Orders and Redemption Orders under this Agreement.

“Basket” means 50,000 Shares, except that the Trustee, in consultation with the Sponsor, may from time to time increase or decrease the number of Shares comprising a Basket.

“Basket Japanese Yen Amount” is the amount of Japanese Yen that must be deposited for issuance of one Basket or that, subject to the exception stated in Section 2.7, is deliverable upon Surrender of one Basket. The Basket Japanese Yen Amount will be determined as provided in Section 2.4(b).

“Beneficial Owner” means any Person owning, through DTC, a DTC Participant, or an Indirect Participant, a Share.

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“Certificate” means a certificate that may be executed and delivered by the Trustee under this Agreement evidencing Shares.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commission” means the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

“Corporate Trust Office” means the office of the Trustee at which its depositary receipt business is administered which, at the date of this Agreement, is located at 101 Barclay Street, New York, New York 10286.

“Deliver” means (a) when used with respect to Japanese Yen, either (i) a wire transfer of immediately available Japanese Yen to the account specified by the Person entitled to the Delivery or (ii) if requested by the Person entitled to the Delivery, delivery of a certified or official bank check for Japanese Yen payable as requested by the person entitled to the Delivery and (b) when used with respect to Shares, either (i) one or more book-entry transfers of those Shares to an account or accounts at DTC designated by the Person entitled to such delivery for further credit as specified by that Person or (ii) in the circumstances specified in Section 2.3(e), execution and delivery at the Corporate Trust Office of the Trustee of one or more Certificates evidencing those Shares.

“Deposit Account Agreement” means the Deposit Account Agreement entered into between the Trustee and the Depository, substantially in the form annexed hereto as Exhibit A, as it may be amended or supplemented in accordance with this Agreement.

“Depositor” means any Authorized Participant that deposits Japanese Yen into the Trust, either for its own account or on behalf of another Person that is the owner or beneficial owner of those Japanese Yen.

“Depository” means JPMorgan Chase Bank, N.A., London Branch.

3

“Dollars” or “$” means the official currency of the United States of America.

“DTC” means The Depository Trust Company, its nominees and their respective successors.

“DTC Participant” means a Person that, pursuant to DTC’s governing documents, is entitled to deposit securities with DTC in its capacity as a “participant.”

“Exchange” means the exchange on which the Shares are principally traded, as specified by the Sponsor, initially the New York Stock Exchange.

“Fiscal Year” means the annual accounting periods of the Trust which will end on October 31 of each year.

“Indemnified Amounts” is defined in Section 7.1.

“Indemnitee” is defined in Section 7.1.

“Indemnitor” is defined in Section 7.1.

“Indirect Participant” means a Person that, by clearing securities through, or maintaining a custodial relationship with, a DTC Participant, has access to the DTC clearing system.

“Interest Account” means the interest-bearing account for the Trust’s assets maintained with the Depository pursuant to the Deposit Account Agreement.

“Japanese Yen” means the official currency of Japan.

“Local Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day which has been designated a bank holiday in Japan.

4

“NAV” means the net asset value of the Trust determined under Section 4.1.

“NAV per Basket” means the value of a Basket determined under Section 2.4.

“NAV per Share” means the value of a Share determined under Section 4.1.

“New York Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which the Exchange is not open for regular trading at noon, New York time.

“Non-Interest Account” means the non-interest-bearing account maintained with the Depository pursuant to the Deposit Account Agreement.

“Noon Buying Rate” means the Japanese Yen/Dollar exchange rate, as determined and published by the Federal Reserve Bank of New York each New York Business Day at approximately 12:00 PM (New York time).

“Order Cutoff Time” means (i) [            ] PM (New York time) or (ii) another time agreed to by the Sponsor and the Trustee and of which Registered Owners and all existing Authorized Participants have been notified by the Trustee.

“Order Date” means, with respect to a Purchase Order, the date specified in Section 2.4(a) and, with respect to a Redemption Order, the date specified in Section 2.7.

“Person” means any natural person or any limited liability company, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

5

“Proceeding” is defined in Section 7.1.

“Purchase Order” is defined in Section 2.4.

“Qualified Bank” means a bank, trust company, corporation or national banking association organized and doing business under the laws of the United States or any State of the United States that is authorized under those laws to exercise corporate trust powers and that (i) is a DTC Participant or a participant in such other securities depository as is then acting with respect to the Shares, (ii) unless counsel to the Sponsor determines that the following requirement is not necessary for the exception under Section 408(m) of the Code to apply, is a banking institution as defined in Section 408(n) of the Code and (iii) had, as of the date of its most recent annual financial statements, an aggregate capital, surplus and undivided profits of at least $500,000,000.

“Redemption Order” is defined in Section 2.7.

“Registered Owner” means the Person in whose name Shares are registered on the books of the Trustee maintained for that purpose.

“Registrar” means any bank or trust company that is appointed to register Shares and transfers of Shares as herein provided.

“Relevant Price” means the Noon Buying Rate, except as provided below. If, on a particular evaluation day, the Federal Reserve Bank of New York does not announce a Noon Buying Rate by 2:00 PM (New York time), then the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate will be the “Relevant Price” and be used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for such valuation. In the event that the Trustee and the Sponsor determine that the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate is not an appropriate basis for valuation of the Trust’s Japanese Yen, they shall determine an alternative basis for such evaluation to be employed by the Trustee, which will be the “Relevant Price.”

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“Settlement Date” means, with respect to a Purchase Order, the date specified in Section 2.4(a) and, with respect to a Redemption Order, the date specified in Section 2.7.

“Shares” means Japanese Yen Shares created under this Agreement, each representing a fractional undivided ownership interest in the net assets of the Trust, which interest shall equal a fraction, the numerator of which is 1 and the denominator of which is the total number of Shares outstanding.

“Sponsor” means Rydex Specialized Products LLC, a Delaware limited liability company, d/b/a “Rydex Investments”.

“Sponsor’s Fee” means the fee to be paid to the Sponsor, which for each day shall be equal to (.004/365 or 366, depending on the number of days in the year) multiplied by (the Japanese Yen in the Trust as of the close of business on the preceding Local Business Day, which shall include all unpaid interest but exclude unpaid fees, each as accrued through the immediately preceding day).

“Sponsor Indemnified Persons” is defined in Section 7.1.

“Surplus Property” means any Trust Property other than (i) Japanese Yen deposited by or on behalf of Authorized Participants pursuant to Section 2.4, in the Interest Account or the Non-Interest Account, (ii) Japanese Yen received as interest on Japanese Yen in the Interest Account, (iii) amounts withdrawn from the Interest Account in order to make a redemption described in Section 2.7, or (iv) amounts being held for the payment of estimated Trust expenses.

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“Surrender” means, when used with respect to Shares, (a) one or more book-entry transfers of Shares to the DTC account of the Trustee or (b) surrender to the Trustee at its Corporate Trust Office of one or more Certificates evidencing Shares.

“Trust” means the CurrencyShares Japanese Yen Trust, the trust entity created by this Agreement.

“Trust Property” means the Japanese Yen that are deposited under this Agreement and any other money or other property that is received by the Trustee in respect of Trust Property and that is being held under this Agreement. Trust Property shall not include any property subject to distribution for which the record date for determining Registered Owners entitled to such distribution has passed.

“Trustee” means The Bank of New York, a New York banking corporation, in its capacity as trustee under this Agreement, or any successor as trustee under this Agreement.

“Trustee Indemnified Persons” is defined in Section 7.1.

Section 1.2 Rules of Construction.

Unless the context otherwise requires:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect in the United States;

(iii) “or” is not exclusive;

(iv) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

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(v) “including” means including without limitation; and

(vi) words in the singular include the plural and words in the plural include the singular.

ARTICLE 2

STATEMENT OF PURPOSE;

CREATION AND DECLARATION OF TRUST;

FORM OF CERTIFICATES; DEPOSIT OF JAPANESE YEN; DELIVERY,

REGISTRATION OF TRANSFER AND SURRENDER OF SHARES

Section 2.1 Statement of Purpose; Duties and Powers of the Trust.

(a) The Trust is a passive investment vehicle that is not actively managed. The sole purpose of the Trust is to hold Japanese Yen on behalf of the Registered Owners. The Trust shall have no directors or persons acting in similar capacity and no officers or employees, and shall act only through the Trustee and the Sponsor.

(b) The Trust shall have the power to receive and hold deposits of Japanese Yen, issue Baskets representing those deposits, distribute Japanese Yen upon surrenders of Baskets, and perform acts incidental to the foregoing as provided in this Agreement, but the Trust shall not have the power to engage in any other business activities.

Section 2.2 Creation and Declaration of Trust; Business of the Trust.

(a) The Trustee acknowledges that an initial deposit of 10,000 Japanese Yen under and in accordance with this Agreement has been made in the Interest Account by the Sponsor on the date hereof in exchange for one Share. The Sponsor is purchasing the initial Share solely for the purpose of forming the Trust. The Sponsor will redeem the initial Share for 10,000 Japanese Yen as promptly as practicable after the Form S-1 registration statement filed with the Commission with respect to the Shares is declared effective by the Commission and the Initial Purchaser, as defined in the registration statement, deposits Japanese Yen in accordance with the registration statement.

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(b) The Trustee declares that it will hold that initial deposit and all other Trust Property as trustee for the benefit of the Registered Owners for the purposes of, and subject to and limited by the terms and conditions set forth in, this Agreement. The trust created by this Agreement shall be known as the “CurrencyShares^SM Japanese Yen Trust”.

Section 2.3 Form of Certificates; Book-Entry System; Transferability of Shares.

(a) The Certificates evidencing Shares shall be substantially in the form set forth in Exhibit B annexed to this Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. No Shares shall be entitled to any benefits under this Agreement or be valid or obligatory for any purpose unless a Certificate evidencing those Shares has been executed by the Trustee by the manual or facsimile signature of a duly authorized signatory of the Trustee and, if a Registrar (other than the Trustee) for the Shares shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar. The Trustee shall maintain books on which the registered ownership of each Share and transfers, if any, of such registered ownership shall be recorded. Certificates evidencing Shares bearing the manual or facsimile signature of a duly authorized signatory of the Trustee and the manual signature of a duly authorized officer of the Registrar, if applicable, who was, at the time such Certificates were executed, a proper signatory of the Trustee or Registrar, if applicable, shall bind the Trustee, notwithstanding that such signatory has ceased to hold such office prior to the delivery of such Certificates.

(b) The Certificates may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of this Agreement as may be required by the Trustee or required to comply with any applicable law or regulations thereunder or with the rules and regulations of the Exchange or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which the Shares evidenced by a particular Certificate are subject.

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(c) The Sponsor and the Trustee will apply to DTC for acceptance of the Shares in its book-entry settlement system. Shares deposited with DTC shall be evidenced by one or more global Certificates which shall be registered in the name of Cede & Co., as nominee for DTC, and shall bear the following legend:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE AGENT AUTHORIZED BY THE ISSUER FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

(d) So long as the Shares are eligible for book-entry settlement with DTC and such settlement is available, unless otherwise required by law, notwithstanding the provisions of Section 2.3(a) and Section 2.3(b), all Shares shall be evidenced by one or more global Certificates the Registered Owner of which is DTC or a nominee of DTC and (i) no Beneficial Owner of Shares will be entitled to receive a separate Certificate evidencing those Shares, (ii) the interest of a Beneficial Owner in Shares represented by a global Certificate will be shown only on, and transfer of that interest will be effected only through, records maintained by DTC or a DTC Participant or Indirect Participant through which the Beneficial Owner holds that interest and (iii) the rights of a Beneficial Owner with respect to Shares represented by a global Certificate will be exercised only to the extent allowed by, and in compliance with, the arrangements in effect between such Beneficial Owner and DTC or the DTC Participant or Indirect Participant through which that Beneficial Owner holds an interest in Shares.

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(e) If, at any time when Shares are evidenced by a global Certificate, DTC ceases to make its book-entry settlement system available for such Shares, the Trustee shall execute and deliver separate Certificates evidencing Shares to the DTC Participants entitled thereto, with such additions, deletions and modifications to this Agreement and to the form of Certificate evidencing Shares as the Sponsor and the Trustee may agree.

(f) Title to a Certificate evidencing Shares (and to the Shares evidenced thereby), when properly endorsed or accompanied by proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided, however, that the Trustee, notwithstanding any notice to the contrary, may treat the Registered Owner of Shares as the absolute owner thereof for the purpose of determining the person entitled to any distribution or to any notice provided for in this Agreement and for all other purposes.

Section 2.4 Deposit of Japanese Yen.

(a) After the deposit of Japanese Yen in the Trust by the Initial Purchaser, as defined in the registration statement, the issuance and Delivery of Shares will take place only in integral numbers of Baskets and in compliance with the provisions of this Agreement, as supplemented by any procedures attached to an applicable Authorized Participant Agreement, to the extent those procedures are consistent with this Agreement. Authorized Participants wishing to acquire from the Trustee one or more Baskets must place an order with the Trustee (a “Purchase Order”). Purchase Orders received by the Trustee prior to the Order Cutoff Time on a New York Business Day will have that day as the Order Date. Purchase Orders received on a day that is not a New York Business Day or received after the Order Cutoff Time on a New York Business Day will have the next following New York Business Day as the Order Date. The “Settlement Date” for a

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Purchase Order shall be the third New York Business Day following the Order Date unless that day is not a Local Business Day, in which case the Settlement Date shall be the next following day that is both a New York Business Day and a Local Business Day. As consideration for each Basket acquired, Authorized Participants must deposit with the Depository the Basket Japanese Yen Amount determined by the Trustee on the Business Day prior to the Settlement Date for the corresponding Purchase Order. The Basket Japanese Yen Amount shall be deposited in the Non-Interest Account. Pursuant to Section 6.5, the Trustee shall contemporaneously instruct the Depository to transfer the portion of the Basket Japanese Yen Amount representing principal from the Non-Interest Account to the Interest Account. The portion of the Basket Japanese Yen Amount representing a pro rata portion of accrued but unpaid interest will remain in the Non-Interest Account.

(b) The Trustee shall determine the Basket Japanese Yen Amount for each New York Business Day. The initial “Basket Japanese Yen Amount” is 500,000,000 Japanese Yen. After the initial deposit, the “Basket Japanese Yen Amount” shall be an amount of Japanese Yen equal to the quotient obtained by dividing the NAV per Basket on the date on which the determination is being made by the Relevant Price on such date. For purposes of this computation, “NAV per Basket” is the product obtained by multiplying (x) the NAV per Share determined in compliance with Section 4.1, by (y) the number of Shares which constitute a Basket on the date on which the determination is being made. Fractions of a Japanese Yen smaller than .001 shall be disregarded. The Sponsor intends to publish, or may designate other persons to publish, for each New York Business Day, the Basket Japanese Yen Amount.

(c) If the Trust Property includes Surplus Property, no deposits of Japanese Yen will be accepted until after a record date for distribution of that money or property, or proceeds from that property, has passed.

(d) All deposited Japanese Yen shall be owned by the Trust and held for the Trust by the Depository in the Interest Account or the Non-Interest Account. Any assets of the Trust other than Japanese Yen shall be held by the Trustee or the Depository at such place and in such manner as the Trustee shall determine.

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Section 2.5 Delivery of Shares.

Upon receipt by the Trustee of any deposit in accordance with Section 2.4, together with a Purchase Order and the other documents required under this Agreement, if any, and a confirmation from the Depository that the Basket Japanese Yen Amount has been Delivered to the Depository for each Basket of Shares and the Depository is holding those Japanese Yen for the account of the Trust, the Trustee, subject to the terms and conditions of this Agreement, shall Deliver to the Depositor the number of Baskets of Shares issuable in respect of such deposit as requested in the corresponding Purchase Order, but only upon payment to the Trustee of the fees and expenses of the Trustee as provided in Section 6.7 and of all taxes and governmental charges and fees payable in connection with such deposit, the transfer of the Japanese Yen and the issuance and Delivery of the Shares.

Section 2.6 Registration and Registration of Transfer of Shares; Combination and Split-up of Certificates.

(a) The Trustee shall keep or cause to be kept a register of Registered Owners of Shares and shall provide for the registration of Shares and the registration of transfers of Shares.

(b) The Trustee, subject to the terms and conditions of this Agreement, shall register transfers of ownership of Shares on its transfer books from time to time, upon any Surrender of a Certificate evidencing such Shares, by the Registered Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, and duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Trustee shall execute a new Certificate or Certificates evidencing such Shares, and deliver the same to or upon the order of the Person entitled thereto.

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(c) The Trustee, subject to the terms and conditions of this Agreement, shall, upon Surrender of a Certificate or Certificates evidencing Shares for the purposes of effecting a split-up or combination of that certificate or certificates, execute and deliver one or more new Certificates evidencing those Shares.

(d) The Trustee may, with the written approval of the Sponsor (which approval shall not be unreasonably withheld), appoint one or more co-transfer agents for the purpose of effecting registration of transfers of Shares and combinations and split-ups of Certificates at designated transfer offices on behalf of the Trustee at the Trustee’s expense. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Registered Owners or Persons entitled to Shares and will be entitled to protection and indemnity to the same extent as the Trustee.

Section 2.7 Surrender of Shares and Withdrawal of Trust Property.

Upon Surrender of any integral number of Baskets for the purpose of withdrawal of the amount of Trust Property represented thereby, and upon payment of the fee of the Trustee in connection with the Surrender of Shares as provided in Section 6.7 and payment of all taxes and charges payable in connection with such Surrender and withdrawal of Trust Property, and subject to the terms and conditions of this Agreement, an Authorized Participant acting on authority of the Registered Owner of those Shares will be entitled to Delivery, in accordance with the provisions of this Agreement, as supplemented by any procedures attached to an applicable Authorized Participant Agreement, to the extent those procedures are consistent with this Agreement, of the amount of Trust Property at the time represented by such Baskets, including the Basket Japanese Yen Amounts corresponding to such Baskets for the New York Business Day prior to the Settlement Date (as defined below), but excluding from those Basket Japanese Yen Amounts any portion that represents the value of Trust Property that is not held as Japanese Yen. Authorized Participants wishing to redeem one or more Baskets must place an order with the Trustee (a “Redemption Order”). Redemption Orders

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received by the Trustee prior to the Order Cutoff Time on a New York Business Day will have that day as the Order Date. Redemption Orders received by the Trustee after the Order Cutoff Time on a New York Business Day or on a day that is not a New York Business Day will have the next New York Business Day as the Order Date. The “Settlement Date” for a Redemption Order shall be the third New York Business Day following the Order Date unless that day is not a Local Business Day, in which case the Settlement Date shall be the next following day that is both a New York Business Day and a Local Business Day. Any Trust Property other than Japanese Yen will be delivered by the Trustee.

The Trustee may require that a Certificate evidencing Shares Surrendered for the purpose of withdrawal is properly endorsed in blank or accompanied by proper instruments of transfer in blank. Upon a Surrender of an integral number of Baskets of Shares and satisfaction of all the conditions for withdrawal of Trust Property, the Trustee shall instruct the Depository to Deliver, to or to the order of the Surrendering Authorized Participant, the amount of Japanese Yen represented by the Surrendered Baskets of Shares and the Depository or the Trustee shall pay or deliver to or to the order of the Surrendering Authorized Participant the amount of any other Trust Property represented by the Surrendered Baskets of Shares. Any Delivery of Japanese Yen other than by wire transfer or at the office of the Depository will be at the expense and risk of the Authorized Participant.

Section 2.8 Limitations on Delivery, Registration of Transfer and Surrender of Shares.

(a) As a condition precedent to the Delivery, registration of transfer, split-up, combination or Surrender of any Shares or withdrawal of any Trust Property, the Trustee or Registrar may require payment from the Depositor or the Authorized Participant Surrendering the Shares of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to any securities being withdrawn)

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and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Trustee may establish consistent with the provisions of this Agreement, including this Section 2.8.

(b) The Delivery of Shares against deposits of Japanese Yen or the registration of transfer of Shares may be suspended generally, or refused with respect to particular requested Deliveries or transfers, during any period when the transfer books of the Trustee are closed or if any such action is deemed necessary or advisable by the Trustee or the Sponsor for any reason at any time or from time to time.

(c) The Surrender of Shares for purposes of withdrawing Trust Property may be suspended by the Trustee only if (i) the Trust holds Surplus Property that has not been distributed in accordance with Section 4.5 or (ii) the Trustee determines, in its sole discretion, that a suspension is necessary or desirable. In either case, the Trustee and the Depository shall consult with each other and use good faith efforts to resume accepting and honoring Redemption Orders as soon as possible.

Section 2.9 Lost Certificates, Etc.

The Trustee shall execute and deliver a new Certificate of like tenor in exchange and substitution for a mutilated Certificate upon cancellation thereof, or in lieu of and in substitution for a destroyed, lost or stolen Certificate if the Registered Owner thereof has (a) filed with the Trustee (i) a request for such execution and delivery before the Trustee has notice that the Shares evidenced by the Certificate have been acquired by a protected purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Trustee.

Section 2.10 Cancellation and Destruction of Surrendered Certificates.

All Certificates Surrendered to the Trustee shall be canceled by the Trustee. The Trustee is authorized to destroy Certificates so canceled.

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Section 2.11 Splits and Reverse Splits of Shares.

If requested in writing by the Sponsor, the Trustee shall effect a split or reverse split of the Shares as of a record date set by the Trustee in accordance with procedures determined by the Trustee.

The Trustee is not required to distribute any fraction of a Share in connection with a split or reverse split of the Shares. The Trustee may sell the aggregated fractions of Shares that would otherwise be distributed in a split or reverse split of the Shares or the amount of Trust Property that would be represented by those Shares and distribute the net proceeds of those Shares or that Trust Property to the Registered Owners entitled to them.

The amount of Trust Property represented by each Share and the Basket Japanese Yen Amount shall be adjusted as appropriate as of the open of business on the New York Business Day following the record date for a split or reverse split of the Shares.

ARTICLE 3

CERTAIN OBLIGATIONS OF REGISTERED OWNERS OF SHARES

Section 3.1 Liability of Registered Owner for Taxes and Other Governmental Charges.

If any tax or other governmental charge shall become payable by the Trustee with respect to any transfer or redemption of Shares, such tax or other governmental charge shall be payable by the Registered Owner of such Shares to the Trustee. The Trustee shall refuse to effect any registration of transfer of such Shares or any withdrawal of Trust Property represented by such Shares until such payment is made, and may withhold any distributions, or may sell for the account of the Registered Owner thereof Trust Property or Shares, and may apply such distributions or the proceeds of any such sale in payment of such tax or other governmental charge, and the Registered Owner

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of such Shares shall remain liable for any deficiency. The Trustee shall distribute any net proceeds of a sale made under the preceding sentence that remain, after payment of the tax or other governmental charge, to the Registered Owners entitled thereto as in the case of a distribution in cash.

Section 3.2 Warranties on Deposit of Japanese Yen.

Every Person depositing Japanese Yen under this Agreement shall be deemed thereby to represent and warrant that the Person making such deposit is duly authorized to do so and that at the time of delivery, the Japanese Yen are free and clear of any lien, pledge, encumbrance, right, charge or claim (other than the rights created by this Agreement). All representations and warranties deemed made under this Section 3.2 shall survive the deposit of Japanese Yen, Delivery or Surrender of Shares or termination of this Agreement.

ARTICLE 4

ADMINISTRATION OF THE TRUST

Section 4.1 Evaluation of Japanese Yen; Calculation of Net Asset Value.

As promptly as practicable after the determination of the Relevant Price on each New York Business Day, ordinarily no later than 2:00 PM (New York time), the Trustee will calculate, and the Sponsor or a person designated by the Sponsor will publish, the Trust’s net asset value (“NAV”). To calculate the NAV, the Trustee will:

(a) take the sum of Japanese Yen in the Interest Account and Non-Interest Account as of the close of business on the preceding Local Business Day, as reported by the Depository;

(b) add interest accrued but unpaid on the Interest Account through the preceding day;

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(c) subtract the accrued but unpaid Sponsor’s Fee through the preceding day;

(d) add Japanese Yen receivable by the Trust under Purchase Orders having Order Dates on or before the preceding New York Business Day;

(e) subtract Japanese Yen payable by the Trust under Redemption Orders having Order Dates on or before the preceding New York Business Day;

(f) convert the result after step (e) into Dollars using the Relevant Price;

(g) add the Dollar value of any other assets included in the Trust Property as of the close of business on the preceding New York Business Day; and

(h) subtract the Dollar value of any other expenses and liabilities of the Trust as of the close of business on the preceding New York Business Day.

The result is the NAV of the Trust for that New York Business Day. The Trustee shall also divide the NAV of the Trust by the number of Shares outstanding for the date of the evaluation then being made, which figure is the “NAV per Share.” For purposes of the preceding sentence, the number of Shares deemed outstanding shall include Shares to be Delivered under Purchase Orders having Order Dates on or before the preceding New York Business Day and shall exclude Shares to be Surrendered under Redemption Orders having Order Dates on or before the preceding New York Business Day.

Section 4.2 Responsibility of the Trustee for Evaluations.

The Sponsor, Depositors, Registered Owners and Beneficial Owners may rely on any evaluation or determination of any amount made by the Trustee, and the Sponsor shall have no responsibility for the accuracy thereof. The determinations made by the Trustee under this Agreement shall be made in good faith upon the basis of, and the Trustee shall not be liable for any errors contained in, information reasonably

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available to it. The Trustee shall be under no liability to the Sponsor, or to Depositors, Registered Owners or Beneficial Owners, for errors in judgment; provided, however, that this provision shall not protect the Trustee against any liability to which it would otherwise be subject by reason of negligence or bad faith in the performance of its duties.

Section 4.3 Interest Account and Non-Interest Account.

The Trustee will deposit all Japanese Yen into the Interest Account or the Non-Interest Account in accordance with Section 6.5. The Interest Account will accrue interest in accordance with the terms of the Deposit Account Agreement. The Non-Interest Account will not accrue interest.

Section 4.4 Cash Distributions.

On the first Local Business Day of each month, the Depository will deposit into the Non-Interest Account the accrued but unpaid interest for the previous month. On the first day of each month that is both a Local Business Day and a New York Business Day, the Trustee will make withdrawals from the Non-Interest Account to pay the accrued Sponsor’s Fee for the previous month plus any other Trust expenses. In the event that the interest deposited exceeds the sum of the Sponsor’s Fee for the previous month plus other Trust expenses, if any, then the Trustee shall convert the excess into Dollars in accordance with Section 4.9, and, as promptly as practicable declare a record date and distribute the net proceeds to Registered Owners on a pro rata basis (in accordance with the number of Shares that they own); provided, however, that in the event that the Trustee shall be required to withhold and does withhold from such cash an amount on account of taxes, the amount distributed to the Registered Owners shall be reduced accordingly; and provided, further, that the Trustee shall round the amount paid to each Registered Owner to the nearest whole cent.

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Section 4.5 Distributions of Surplus Property.

At any time that the Trust Property includes Surplus Property, the Trustee shall, as promptly as practicable, (a) distribute all Surplus Property consisting of Dollars to the Registered Owners in proportion to the number of Shares held by them, and (b) convert into Dollars or sell for Dollars all other Surplus Property and distribute the Dollar proceeds, net of the fees and expenses of the Trustee, to the Registered Owners in proportion to the number of Shares held by them. If the Trust Property includes any Surplus Property that is not Japanese Yen, the Trustee shall suspend deposits of Japanese Yen for the purpose of issuance of Shares until after a record date for distribution of that Surplus Property, or proceeds of that Surplus Property, has passed.

Section 4.6 Fixing of Record Date.

Whenever any distribution will be made, or whenever the Trustee receives notice of any solicitation of proxies or consents from Registered Owners, or whenever for any reason there is a split, reverse split or other change in the outstanding Shares, or whenever the Trustee shall find it necessary or convenient in respect of any matter, the Trustee, in consultation with the Sponsor, shall fix a record date for the determination of the Registered Owners who shall be (i) entitled to receive such distribution or the net proceeds of the sale thereof, (ii) entitled to give such proxies or consents in respect of any such solicitation or (iii) entitled to act in respect of any other matter for which the record date was set.

Section 4.7 Payment of Trust Expenses.

(a) The following expenses are or may be accrued and paid by the Trust:

(1) the Sponsor’s Fee and other fees and expenses of the Sponsor set forth in Section 5.6;

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(2) expenses of the Trust not assumed by the Sponsor pursuant to Section 5.1(b);

(3) taxes and other governmental charges;

(4) expenses and costs of any extraordinary services performed by the Trustee or the Sponsor on behalf of the Trust or action taken by the Trustee or the Sponsor to protect the Trust or the interests of Registered Owners; and

(5) indemnification of the Sponsor as provided in Section 7.1(d).

(b) On first day of each month that is both a Local Business Day and a New York Business Day, the Trustee shall withdraw from the Non-Interest Account amounts necessary to pay the Trust expenses provided for in Section 4.7(a) and any otherwise unpaid expenses hereunder. In the event that the expenses exceed the balance of the Non-Interest Account, such excess shall be withdrawn from the Interest Account. The Trustee will withdraw and sell sufficient Japanese Yen to purchase an amount of currency other than Japanese Yen sufficient to pay any Trust expenses payable other than in Japanese Yen and the costs of currency conversion.

(c) Notwithstanding the foregoing, if requested by the Sponsor and agreed to by the Trustee, the Trustee will advance amounts out of its own funds for the payment of Trust expenses, provided that the amount advanced at any time shall not exceed $20,000. The amount of such advances, together with interest thereon at a percentage rate equal to then-current overnight federal funds rate, shall be expenses of the Trust. The Trustee shall have a lien on the balances on hand in the Interest Account and Non-Interest Account to the extent of all amounts advanced by it pursuant to this Section 4.7(c), which lien shall be superior to the interest of the Registered Owners.

(d) The Trustee is conclusively authorized to sell Japanese Yen in the smallest amounts required to permit payment of Trust expenses, it being the intention to minimize the Trust’s holdings of assets other than Japanese Yen. Neither the Trustee nor the Sponsor shall have any liability for loss or depreciation resulting from sales of Japanese Yen so made. The Trustee shall not be liable or responsible in any way for depreciation or loss incurred by reason of any sale made in accordance with this Section 4.7(d).

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Section 4.8 Statements and Reports.

After the end of each Fiscal Year and within the time period required by applicable laws, rules and regulations, at the Sponsor’s expense, the Trustee shall send to the Registered Owners as of the end of such Fiscal Year, an annual report of the Trust containing financial statements audited by independent accountants designated by the Sponsor and such other information as may be required by such laws, rules and regulations or otherwise, or which the Sponsor determines shall be included. The Trustee may distribute the annual report by any means acceptable to the Registered Owners and that complies with applicable laws, rules and regulations.

Section 4.9 Further Provisions for Sales of Trust Property; Currency Conversion.

In addition to selling Japanese Yen in accordance with Section 4.7, the Trustee shall sell Japanese Yen whenever any one or more of the following conditions exist:

(i) the Sponsor has notified the Trustee that such sale is required by applicable law or regulation; or

(ii) the Trust is to be terminated and its assets liquidated in accordance with Section 8.2.

When the Trustee is required or permitted to sell Trust Property, it may sell that Trust Property by public or private sale in any manner and on any terms that are (i) commercially reasonable in the circumstances and (ii) reasonably calculated to maximize the value of the Trust Property while taking into account any duty of the Trustee under this Agreement to sell that Trust Property as promptly as practicable.

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However, whenever the Trustee is required or permitted to sell Trust Property that is currency, if at the time the currency can, in the judgment of the Trustee, be converted on a reasonable basis into the required currency that, if applicable, is transferable to the United States, the Trustee shall place orders with dealers (which may include the Depository or the Trustee or any of their affiliates) through which it may reasonably expect to obtain a commercially reasonable rate of exchange (net of commission) and good execution of orders.

If such conversion can be effected only with the approval or license of any government or agency thereof, the Trustee shall file such application for approval or license, if any, as it may deem desirable.

If at any time the Trustee shall determine that in its judgment the currency is not convertible on a reasonable basis into the required currency or that, if applicable, is transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Trustee is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Trustee, the Trustee may distribute the currency without conversion (or an appropriate document evidencing the right to receive such currency) to, or in its discretion may hold such currency for the respective accounts of, the persons entitled to receive it. Any interest earned or investment gains attributable to amounts withheld from distribution shall be held by the Trustee for distribution to the Registered Owners entitled to the amount to which the interest or gain is attributable.

If any such conversion of currency, in whole or in part, cannot be effected for distribution to some of the persons entitled to it, the Trustee may, in its discretion, make such conversion and distribution to the extent permissible to the persons entitled to it and may distribute the balance of the currency without conversion to, or in its

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discretion may hold such currency for the respective accounts of, the persons entitled to receive it. Any interest earned or investment gains attributable to amounts withheld from distribution shall be held by the Trustee for distribution to the Registered Owners entitled to the amount to which the interest or gain is attributable.

The Trustee and the Sponsor shall not be liable or responsible in any way for depreciation or loss incurred by reason of any sale made pursuant to this Section 4.9.

Section 4.10 Counsel.

The Sponsor may from time to time employ counsel to act on behalf of the Trust and perform any legal services in connection with the Japanese Yen and the Trust, including any legal matters relating to the possible disposition or acquisition of any Japanese Yen. The reasonable fees and expenses of such counsel shall be paid by the Sponsor up to an aggregate maximum of $100,000 per year, with any excess amount to be paid by the Trust.

Section 4.11 Grantor Trust.

Nothing in this Agreement, any agreement with a Depository, or otherwise, shall be construed to give the Trustee or Sponsor the power to vary the investment of the Beneficial Owners within the meaning of Section 301.7701-4(c) of the regulations under the Code or any similar or successor provision of the regulations under the Code, nor shall the Sponsor give the Trustee any direction that would vary the investment of the Beneficial Owners. However, the Trustee shall not be liable to any Person for any failure of the Trust to qualify as a grantor trust under the Code or any comparable provision of the laws of any State or other jurisdiction where that treatment is sought, except that this sentence shall not limit the Trustee’s responsibility for the administration of the Trust in accordance with this Agreement. Neither the Trustee nor the Sponsor will agree to any amendment of the Deposit Account Agreement unless the Sponsor obtains and delivers to the Trustee a prior written opinion of counsel to the effect that such amendment will have no adverse effect on the classification of the Trust as a “grantor trust” under the Code.

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ARTICLE 5

THE SPONSOR

Section 5.1 Duties of the Sponsor.

(a) The Sponsor shall select the Depository and shall be solely responsible for that selection. The Sponsor is responsible for establishing the Trust and for the registration of the Shares. The Sponsor will generally oversee the performance of the Trustee and the Trust’s principal service providers, but will not exercise day-to-day oversight over the Trustee or such service providers. The Sponsor will regularly communicate with the Trustee to monitor the overall performance of the Trust. The Sponsor will also designate the independent certified public accountants of the Trust and may from time to time employ legal counsel for the Trust.

(b) The Sponsor shall be responsible for all organizational expenses of the Trust, and for the following administrative and marketing expenses of the Trust: the Trustee’s monthly fee, routine transaction and maintenance fees charged by the Depository, listing fees of the Exchange, registration fees charged by the Commission, printing and mailing costs, audit fees, legal expenses not in excess of $100,000 per year and any applicable license fees.

(c) The Sponsor will monitor the interest rate paid by the Depository and has the right and duty to instruct the Trustee to terminate the Deposit Account Agreement if the Sponsor considers the interest rate to be noncompetitive.

Section 5.2 Obligations of the Sponsor.

(a) The Sponsor does not assume any obligation nor shall it be subject to any liability under this Agreement to any Registered Owner or Beneficial Owner or Depositor (including liability with respect to the worth of the Trust Property), except that the Sponsor agrees to perform its obligations specifically set forth in this Agreement without negligence or bad faith.

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(b) The Sponsor shall not be under any obligation to prosecute any action, suit or other proceeding in respect of any Trust Property or in respect of the Shares on behalf of a Registered Owner, Beneficial Owner, Depositor or other Person.

(c) The Sponsor shall not be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any Depositor, any Registered Owner or any other person believed by it in good faith to be competent to give such advice or information.

(d) The Sponsor shall not be liable for any acts or omissions made by a successor sponsor whether in connection with a previous act or omission of the Sponsor or in connection with any matter arising wholly after the resignation of the Sponsor, provided that in connection with the issue out of which such potential liability arises the Sponsor performed its obligations without negligence or bad faith while it acted as sponsor.

(e) The Sponsor shall have no obligation to comply with any direction or instruction from any Registered Owner or Beneficial Owner or Depositor regarding Shares except to the extent specifically provided in this Agreement.

Section 5.3 Prevention or Delay in Performance by the Sponsor.

The Sponsor and its directors, employees, agents and affiliates shall not incur any liability to any Registered Owner, Beneficial Owner or Depositor if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Sponsor is prevented or forbidden from, or would be subject to any civil or criminal penalty on account of, or is delayed in, doing or performing any act or thing which by the

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terms of this Agreement it is provided shall be done or performed and accordingly the Sponsor does not do that act or thing or does that act or thing at a later time than would otherwise be required. The Sponsor will not incur any liability to any Registered Owner or Beneficial Owner or Depositor by reason of any non-performance or delay in the performance of any act or thing which by the terms of this Agreement it is provided may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Agreement.

Section 5.4 Certain Matters Regarding Successor Sponsor.

The covenants, provisions and agreements herein contained shall in every case be binding upon any successor to the business of the Sponsor. The Sponsor may transfer all or substantially all of its assets to an entity which carries on the business of the Sponsor, if at the time of such transfer such successor duly assumes all the obligations of the Sponsor under this Agreement, and in such event, the Sponsor shall be relieved of all further liability under this Agreement.

Section 5.5 Resignation of Sponsor; Successors.

If at any time the Sponsor desires to resign its position as Sponsor hereunder, it may resign by delivering to the Trustee an instrument of resignation executed by the Sponsor. Such resignation shall become effective upon the earliest of the following: (i) the effective date of the appointment by the Trustee of a successor sponsor and the acceptance by the successor sponsor of that appointment, with such compensation from the Trust as the Trustee may deem reasonable under the circumstances, by an instrument of appointment and assumption executed by the Trustee and the successor sponsor; or (ii) an agreement by the Trustee to act as sponsor hereunder succeeding to all the rights and duties of the resigning Sponsor without appointing a successor sponsor and without terminating this Agreement; or (iii) termination of this Agreement in accordance with its terms and completion of distribution of all remaining assets to Registered Owners. The Trustee shall have no obligation to appoint a successor sponsor or to assume the duties of the Sponsor and shall have no liability to any person because the Trust is terminated by reason of the Sponsor’s resignation.

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If the Sponsor shall fail to undertake or perform or become incapable of undertaking or performing its duties hereunder or shall become bankrupt or its affairs shall be taken over by public authorities, the effect of that event shall be the same as if the Sponsor had given a notice of resignation as provided in the preceding paragraph.

Upon its resignation becoming effective, the resigning Sponsor shall be discharged and shall no longer be liable in any manner hereunder except as to acts or omissions occurring before its resignation became effective, and the successor sponsor shall thereupon undertake and perform all duties and be entitled to all rights and compensation as sponsor under this Agreement. The successor sponsor shall not be under any liability hereunder for acts or omissions occurring prior to the effective date stated in the instrument appointing it successor sponsor. The Trustee shall notify Registered Owners of the appointment of a successor sponsor.

Section 5.6 Compensation of the Sponsor.

(a) The Sponsor is entitled to receive from the Trust, as an expense of the Trust, the Sponsor’s Fee. The Sponsor’s Fee shall be accrued daily but paid monthly in arrears.

(b) In addition to the Sponsor’s Fee, the Sponsor is entitled to receive reimbursement from the Trust for all expenses and disbursements incurred by it. Such reimbursement shall be made promptly after such expenses are incurred by the Sponsor. Notwithstanding the foregoing, the Sponsor is not entitled to charge the Trust for (i) expenses and disbursements incurred by it prior to the commencement of trading of Shares on the Exchange and (ii) expenses for performing, or fees of agents for performing, services the Sponsor is required to perform under this Agreement.

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(c) Within 30 days following the end of each Fiscal Year, the Sponsor shall certify to the Trustee the amount of its actual expenses and disbursements incurred by it during the preceding Fiscal Year by it in connection with action taken by it pursuant to Section 5.8 and shall reimburse the Trust any amounts received by it from the Trust that exceed the amount so certified.

(d) The Trustee shall have no liability or responsibility for amounts paid to the Sponsor pursuant to this Section 5.6.

Section 5.7 Federal Securities Law Filings.

The Sponsor shall (i) prepare and file a registration statement with the Commission and take such action as is necessary from time to time to qualify the Shares for offering and sale under the federal securities laws of the United States, including the preparation and filing of amendments and supplements to such registration statement, (ii) promptly notify the Trustee of any amendment or supplement to the registration statement or prospectus, of any order preventing or suspending the use of any prospectus, of any request for the amending or supplementing of the registration statement or prospectus or if any event or circumstance occurs that is known to the Sponsor as a result of which the registration statement or prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (iii) provide the Trustee from time to time with copies, including copies in electronic form, of the prospectus, as amended and supplemented, in such quantities as the Trustee may reasonably request and (iv) prepare and file any periodic reports or updates that may be required under the Securities Exchange Act of 1934, as amended. The Trustee shall furnish to the Sponsor any information from the records of the Trust that the Sponsor reasonably requests in writing that is needed to prepare any filing or submission that the Sponsor or the Trust is required to make under the federal securities laws of the United States.

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Section 5.8 Discretionary Actions by Sponsor; Consultation.

(a) The Sponsor may, in its discretion, undertake any action which it may deem necessary or desirable to protect the rights of the Registered Owners. The expenses incurred by the Sponsor in connection with taking any action under the preceding sentence (including the fees and disbursements of legal counsel) shall be expenses of the Trust, and the Sponsor shall be entitled to be promptly reimbursed for those expenses by the Trust.

(b) The Sponsor shall promptly notify the Trustee (i) regarding any action it takes pursuant to Section 5.8(a) or (ii) if the Sponsor becomes aware of any development or event that affects the administration of the Trust but is not contemplated or provided for in this Agreement.

ARTICLE 6

THE TRUSTEE

Section 6.1 Maintenance of Office and Transfer Books by the Trustee.

(a) Until termination of this Agreement in accordance with its terms, the Trustee shall maintain facilities for the Delivery, registration, registration of transfers and Surrender of Shares in accordance with the provisions of this Agreement.

(b) The Trustee shall keep books for the registration of Shares and registration of transfers of Shares which at all reasonable times shall be open for inspection by the Registered Owners.

(c) Subject to the limitations set forth in Section 2.8(b), the Trustee may, and at the reasonable written request of the Sponsor shall, close the transfer books at any time or from time to time if such action is deemed necessary or advisable in the reasonable judgment of the Trustee or the Sponsor.

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(d) Pursuant to Section 2.8(c), the Trustee may, at its sole discretion, suspend withdrawals of Trust Property if the Trustee, at its sole discretion, determines that such a suspension is necessary or desirable.

(e) If any Shares are listed on one or more stock exchanges in the United States, the Trustee shall act as Registrar or, with the written approval of the Sponsor (which approval shall not be unreasonably withheld), appoint a registrar or one or more co-registrars for registry of such Shares in accordance with any requirements of such exchange or exchanges.

Section 6.2 Obligations of the Trustee.

(a) The Trustee assumes no obligation nor shall it be subject to any liability under this Agreement to any Registered Owner or Beneficial Owner or Depositor (including liability with respect to the worth of the Trust Property), except that the Trustee agrees to perform its obligations specifically set forth in this Agreement without negligence or bad faith.

(b) The Trustee shall not be under any obligation to prosecute any action, suit or other proceeding in respect of any Trust Property or in respect of the Shares on behalf of a Registered Owner, Beneficial Owner, Depositor or other Person.

(c) The Trustee shall not be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any Depositor, any Registered Owner or any other person believed by it in good faith to be competent to give such advice or information.

(d) The Trustee shall not be liable for any acts or omissions made by a successor trustee whether in connection with a previous act or omission of the Trustee or in connection with any matter arising wholly after the resignation of the Trustee, provided that in connection with the issue out of which such potential liability arises the Trustee performed its obligations without negligence or bad faith while it acted as Trustee.

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(e) The Trustee shall have no obligation to comply with any direction or instruction from any Registered Owner or Beneficial Owner or Depositor regarding Shares except to the extent specifically provided in this Agreement.

Section 6.3 Prevention or Delay in Performance by the Trustee.

The Trustee and its directors, employees, agents and affiliates shall not incur any liability to any Registered Owner, Beneficial Owner or Depositor if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Trustee is prevented or forbidden from, or would be subject to any civil or criminal penalty on account of, or is delayed in, doing or performing any act or thing which by the terms of this Agreement it is provided shall be done or performed and accordingly the Trustee does not do that act or thing or does that act or thing at a later time than would otherwise be required. The Trustee will not incur any liability to any Registered Owner or Beneficial Owner or Depositor by reason of any non-performance or delay in the performance of any act or thing which by the terms of this Agreement it is provided may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Agreement.

Section 6.4 Resignation or Removal of the Trustee; Appointment of Successor Trustee.

(a) Resignation. The Trustee may at any time resign as Trustee hereunder by notice of its election so to do, delivered to the Sponsor, and such resignation shall take effect upon the appointment of a successor trustee and its acceptance of such appointment.

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(b) Removal by the Sponsor. In case at any time the Trustee shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or a trustee or liquidator or any public officer shall take charge or control of the Trustee or of its property or affairs for the purposes of rehabilitation, conservation or liquidation, then in any such case the Sponsor shall, subject to the requirements of Section 6.4(e), remove the Trustee by notice to the Trustee, and such removal shall take effect upon the appointment of a successor trustee and its acceptance of such appointment.

(c) Removal by Registered Owners. Registered Owners of at least two-thirds (66-2/3 %) of the Shares then outstanding may at any time remove the Trustee by a notice delivered to the Trustee and Sponsor, and such removal shall take effect upon the appointment of a successor trustee and its acceptance of such appointment.

(d) Removal for Material Breach. If at any time the Trustee ceases to be a Qualified Bank or is in material breach of its obligations under this Agreement and the Trustee fails to cure such breach within 30 days after receipt by the Trustee of notice from the Sponsor or Registered Owners acting on behalf of at least 25% of the outstanding Shares specifying such default and requiring the Trustee to cure such default, the Sponsor may remove the Trustee by notice delivered to the Trustee, and such removal shall take effect upon the appointment of a successor trustee and its acceptance of such appointment as hereinafter provided.

(e) Appointing Successor Trustees. If the Trustee acting hereunder resigns or is removed, the Sponsor, acting on behalf of the Registered Owners, shall use its reasonable efforts to appoint a successor trustee, which shall be a Qualified Bank. Every successor trustee shall execute and deliver to its predecessor and to the Sponsor, acting on behalf of the Registered Owners, an instrument in writing accepting its appointment hereunder, and thereupon such successor trustee, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on

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the written request of the Sponsor, acting on behalf of the Registered Owners, shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Trust Property to such successor, and shall deliver to such successor a list of the Registered Owners of all outstanding Shares. The Sponsor or any such successor trustee shall promptly notify the Registered Owners of the appointment of such successor trustee.

(f) Liability of Trustee. Upon effective resignation hereunder, the resigning or removed Trustee shall be discharged and shall no longer be liable in any manner hereunder except as to acts or omissions occurring prior to such resignation or removal, and the new trustee shall thereupon undertake and perform all duties and be entitled to all rights and compensation as trustee under this Agreement. The successor trustee shall not be under any liability hereunder for acts or omissions occurring prior to execution of an instrument accepting its appointment as trustee.

(g) Effect of Merger of the Trustee. Any corporation into which the Trustee may be merged, consolidated or converted in a transaction in which the Trustee is not the surviving corporation shall be the successor of the Trustee without the execution or filing of any document or any further act.

Section 6.5 Transfers Between Interest Account and Non-Interest Account.

(a) Proceeds from creation of Baskets shall be deposited into the Non-Interest Account. The Trustee shall contemporaneously instruct the Depository to transfer the portion of the Basket Japanese Yen Amount representing principal from the Non-Interest Account to the Interest Account. The portion of the Basket Japanese Yen Amount representing a pro rata portion of accrued but unpaid interest will remain in the Non-Interest Account.

(b) Amounts payable upon Surrender of Shares in whole Baskets shall be paid from the Non-Interest Account. The Trustee shall contemporaneously instruct the Depository to transfer the portion of the Basket Japanese Yen Amount representing principal from the Interest Account to the Non-Interest Account.

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Section 6.6 The Depository.

The parties acknowledge that the Depository was selected solely by the Sponsor. The Trustee will have no duty or liability to any Person on account of that selection or the terms of the Deposit Account Agreement. The Depository will be subject at all times and in all respects to the directions of the Trustee and will be responsible solely to it. The rights and duties of the Depository with reference to the Trust will be determined by the Deposit Account Agreement and applicable law. The Trustee shall not amend or terminate the Deposit Account Agreement without the written consent of the Sponsor. The Trustee shall terminate the Deposit Account Agreement if the Sponsor directs it in writing to do so.

Section 6.7 Compensation of the Trustee.

(a) Each Depositor, and each person surrendering Shares for the purpose of withdrawing Trust Property, shall pay to the Trustee a fee of $500.00 per Purchase Order pursuant to Section 2.5 or Redemption Order pursuant to Section 2.7 or surrender of Shares after termination of this Agreement pursuant to Section 8.2(e).

(b) The Trustee is entitled to receive from the Sponsor fees for its services and reimbursement for its out-of-pocket expenses in accordance with written agreements between the Sponsor and the Trustee.

(c) The Trustee is entitled to charge the Trust for all expenses and disbursements incurred by it in connection with action taken by it under Section 6.10(a) (including the reasonable fees and disbursements of its legal counsel), except that the Trustee is not entitled to charge the Trust for (i) expenses and disbursements incurred by it prior to the commencement of trading of Shares on the Exchange and (ii) fees of agents for performing services the Trustee is required to perform under this Agreement.

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Section 6.8 Retention of Trust Documents.

The Trustee is authorized to destroy those documents, records, bills and other data compiled during the term of this Agreement at the times permitted by the laws or regulations governing the Trustee, unless the Sponsor reasonably requests the Trustee in writing to retain those items for a longer period.

Section 6.9 Prospectus Delivery.

The Trustee shall, if required by the federal securities laws of the United States, in any manner permitted by such laws, deliver, at the time of issuance of Shares, a copy of the relevant prospectus, as most recently furnished to the Trustee by the Sponsor, to each Depositor.

Section 6.10 Discretionary Actions by Trustee; Consultation.

(a) The Trustee may, in its discretion, undertake any action which it may deem necessary or desirable to protect the rights of the Registered Owners. The expenses incurred by the Trustee in connection with taking any action under the preceding sentence (including the fees and disbursements of legal counsel) shall be expenses of the Trust, and the Trustee shall be entitled to be promptly reimbursed for those expenses by the Trust.

(b) The Trustee shall notify and consult with the Sponsor before undertaking any action under subsection (a) above or if the Trustee becomes aware of any development or event that affects the administration of the Trust but is not contemplated or provided for in this Agreement.

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ARTICLE 7

INDEMNIFICATION

Section 7.1 Indemnification of the Sponsor and Trustee.

(a) The Sponsor shall indemnify the Trustee, its directors, employees and agents (the “Trustee Indemnified Persons”) against, and hold each of them harmless from, any loss, liability, cost, expense or judgment (including, but not limited to, the reasonable fees and expenses of counsel) (collectively “Indemnified Amounts”) that is incurred by any of them and that arises out of or is related to (i) any offer or sale by the Trust of Baskets of Shares under this Agreement, (ii) acts performed or omitted pursuant to the provisions of this Agreement, as the same may be amended, modified or supplemented from time to time, by (A) a Trustee Indemnified Person or (B) the Sponsor or (iii) any filings with or submissions to the Commission in connection with or with respect to the Shares (which, by way of illustration and not by way of limitation, include any registration statement and any amendments or supplements thereto filed with the Commission or any periodic reports or updates that may be filed under the Securities Exchange Act of 1934, as amended, or any failure to make any filings with or submissions to the Commission which are required to be made in connection with or with respect to the Shares), except that the Sponsor shall not have any obligations under this Section 7.1(a) to pay Indemnified Amounts incurred as a result of and attributable to (x) the negligence or bad faith of, or material breach of the terms of this Agreement by, the Trustee, (y) written information furnished in writing by the Trustee to the Sponsor expressly for use in the registration statement, or any amendment thereto, filed with the Commission relating to the Shares that is not materially altered by the Sponsor or (z) any misrepresentations or omissions made by a Depositor (other than Sponsor) in connection with such Depositor’s offer and sale of Shares.

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(b) The Trustee shall indemnify the Sponsor, its members, officers, employees and agents against, and hold each of them harmless from, any Indemnified Amounts (i) caused by the negligence or bad faith of the Trustee or (ii) arising out of any information furnished in writing to the Sponsor by the Trustee expressly for use in an registration statement, or any amendment thereto, a prospectus pursuant to the Securities Act of 1933 Section 10(a) or Section 10(b), or a prospectus supplement thereto with the Commission relating to the Shares that is not materially altered by the Sponsor.

(c) If the indemnification provided for in Section 7.1(a) or Section 7.1(b) is unavailable or insufficient to hold harmless the indemnified party under subsection (a) or (b) above, then the indemnifying party shall contribute to the Indemnified Amounts referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Sponsor on the one hand and the Trustee on the other hand from the fees each receives that are attributable to the Shares which are the subject of the action or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Sponsor on the one hand and the Trustee on the other hand in connection with the action, statement or omission which resulted in such Indemnified Amount as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact from which the action arises relates to information supplied by the Sponsor or the Trustee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission or the act or omission from which the action arises. The amount of Indemnified Amounts referred to in the first sentence of this subsection (c) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (c).

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(d) The Sponsor and its shareholders, directors, officers, employees, affiliates (as such term is defined under the Securities Act of 1933, as amended) and subsidiaries (each, a “Sponsor Indemnified Party”) shall be indemnified from the Trust and held harmless against any loss, liability or expense incurred without (i) negligence, bad faith, willful misconduct or willful malfeasance on the part of the Sponsor arising out of or in connection with the performance of its obligations under this Agreement or any actions taken in accordance with the provisions of this Agreement or (ii) reckless disregard by the Sponsor of its obligations and duties under this Agreement. Such indemnity shall include payment from the Trust of the costs and expenses incurred by such Sponsor Indemnified Party in defending itself against any claim or liability in its capacity as Sponsor. Any amounts payable to a Sponsor Indemnified Party under this Section 7.1(d) may be payable in advance or shall be secured by a lien on the Trust.

(e) If an action, proceeding (including, but not limited to, any governmental investigation), claim or dispute (each, a “Proceeding”) in respect of which indemnity may be sought by either party is brought or asserted against the other party, the party seeking indemnification (the “Indemnitee”) shall promptly (and in no event more than seven (7) days after receipt of notice of such Proceeding) notify the party obligated to provide such indemnification (the “Indemnitor”) of such Proceeding. The failure of the Indemnitee to so notify the Indemnitor shall not impair the Indemnitee’s ability to seek indemnification from the Indemnitor (but only for costs, expenses and liabilities incurred after such notice) unless such failure adversely affects the Indemnitor’s ability to adequately oppose or defend such Proceeding. Upon receipt of such notice from the Indemnitee, the Indemnitor shall be entitled to participate in such Proceeding and, to the extent that it shall so desire and provided no conflict of interest exists as specified in clause (i) below and there are no other defenses available to Indemnitee as specified in clause (iii) below, to assume the defense thereof with counsel reasonably satisfactory to the Indemnitee (in which case all attorney’s fees and expenses shall be borne by the Indemnitor and the Indemnitor shall in good faith defend the Indemnitee). The Indemnitee shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but, in such case, no fees and expenses of such counsel shall be borne by the Indemnitor unless such fees and expenses are otherwise required to be indemnified under Section 7.1(a), Section 7.1(b) or Section 7.1(d), as applicable, and

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(i) there is such a conflict of interest between the Indemnitor and the Indemnitee as would preclude, in compliance with the ethical rules in effect in the jurisdiction in which the Proceeding was brought, one lawyer from representing both parties simultaneously, (ii) the Indemnitor fails, within the earlier of (x) twenty (20) days following receipt of notice of the Proceeding from the Indemnitee or (y) seven (7) days prior to the date the first response or appearance is required to be made in such Proceeding, to assume the defense of such Proceeding with counsel reasonably satisfactory to the Indemnitee or (iii) there are legal defenses available to Indemnitee that are different from or are in addition to those available to the Indemnitor. No compromise or settlement of such Proceeding may be effected by either party without the other party’s consent unless (m) there is no finding or admission of any violation of law and no effect on any other claims that may be made against such other party and (n) the sole relief provided is monetary damages that are paid in full by the party seeking the settlement. Neither party shall have any liability with respect to any compromise or settlement effected without its consent, which shall not be unreasonably withheld. The Indemnitor shall have no obligation to indemnify and hold harmless the Indemnitee from any loss, expense or liability incurred by the Indemnitee as a result of a default judgment entered against the Indemnitee unless such judgment was entered after the Indemnitor agreed, in writing, to assume the defense of such Proceeding.

ARTICLE 8

AMENDMENT AND TERMINATION

Section 8.1 Amendment.

The Trustee and the Sponsor may amend any provisions of this Agreement without the consent of any Registered Owner; provided, however, that the provisions of Section 2.6, Section 2.7, Section 2.10, Section 4.2 through Section 4.7, this Section 8.1 and Section 8.2 may not be amended unless (i) the provision relates solely to procedural or logistical matters (as distinguished from core economic rights), or (ii) prior to the amendment, (a) the Sponsor obtains and delivers to the Trustee a written opinion of counsel to the effect that after such amendment the Trust will continue to be classified as

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a “grantor trust” under the Code, and (b) in the event that such opinion of counsel assumes that certain actions are taken by the Sponsor or the Trustee in connection with such amendment, such actions shall be taken by the Sponsor or the Trustee, as the case may be. Any amendment that imposes or increases any fees or charges (other than taxes and other governmental charges, registration fees or other such expenses), or that otherwise prejudices any substantial existing right of the Registered Owners, will not become effective as to outstanding Shares until 30 days after notice of such amendment is given to the Registered Owners. Every Registered Owner and Beneficial Owner, at the time any amendment so becomes effective, shall be deemed, by continuing to hold any Shares or an interest therein, to consent and agree to such amendment and to be bound by this Agreement as amended thereby. In no event shall any amendment impair the right of the Registered Owner of Shares to Surrender Baskets of Shares and receive therefor the amount of Trust Property represented thereby, except in order to comply with mandatory provisions of applicable law.

Section 8.2 Termination.

(a) The Trustee shall set a date on which this Agreement will terminate and mail notice of that termination to the Registered Owners at least 30 days prior to the date set for termination, which date shall be no later than 90 days from the mailing of termination notice, if any of the following occurs:

(i) the Sponsor has given notice of resignation or is unable to perform its duties or becomes bankrupt or insolvent and the Trustee will not appoint a successor sponsor or agree to act as Sponsor;

(ii) Registered Owners holding at least 75% of the outstanding Shares notify the Trustee that they elect to terminate the Trust;

(iii) the Depository resigns or is removed; or

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(iv) the Trust receives notice from the Internal Revenue Service or counsel for the Trust or the Sponsor that the Trust fails to qualify for treatment, or will not be treated, as a grantor trust under the Code.

(b) The Trustee shall set a date on which this Agreement will terminate and mail notice of that termination to the Registered Owners at least 30 days prior to the date set for termination, which date shall be no later than 90 days from the mailing of termination notice, if any of the following occurs and the Sponsor has notified the Trustee that it elects to terminate this Agreement:

(i) The Trustee is notified that the Shares are delisted from a national securities exchange and are not approved for listing on another national securities exchange within five New York Business Days of their delisting;

(ii) the Commission determines that the Trust is an investment company under the Investment Company Act of 1940, as amended;

(iii) the NAV of the Trust remains less than $100 million for 30 consecutive New York Business Days at any time after the first 90 days of the Shares being traded on the Exchange;

(iv) all of the Trust’s assets are sold;

(v) the aggregate market capitalization of the Trust, based on the closing price for the Shares remains less than $300 million at any time for five consecutive trading days beginning after the first anniversary of this Agreement; or

(vi) DTC ceases providing book-entry settlement services for the Shares.

(c) If 60 days have elapsed since the Trustee gave the Sponsor notice of its election to resign and no successor trustee appointed by the Sponsor has accepted appointment as Trustee, the Trustee may set a date on which this Agreement will terminate and mail notice of that termination to the Registered Owners at least 30 days prior to the date set for termination.

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(d) If not terminated sooner, this Agreement shall terminate forty years from the date of this Agreement, and the Trustee shall mail a notice of that termination to the Registered Owners and the Sponsor at least 30 days before the termination date.

(e) On and after the date of termination of this Agreement, the Registered Owner of Shares will, upon (i) Surrender of those Shares, (ii) payment of the fee of the Trustee for the Surrender of Shares provided in Section 6.7, and (iii) payment of any applicable taxes or other governmental charges, be entitled to Delivery, to the Registered Owner or upon the Registered Owner’s order, of the amount of Trust Property represented by those Shares. The Trustee shall not accept any deposits of Japanese Yen after the date of termination of this Agreement. If any Shares remain outstanding after the date of termination of this Agreement, the Trustee thereafter shall discontinue the registration of transfers of Shares, shall not make any distributions to Registered Owners, and shall not give any further notices or perform any further acts under this Agreement, except that the Trustee shall continue to collect distributions pertaining to Trust Property and hold the same uninvested and without liability for interest, pay the Trust’s expenses and sell Japanese Yen as necessary to meet those expenses and shall continue to deliver Trust Property, together with any distributions received with respect thereto and the net proceeds of the sale of any other property, in exchange for Shares Surrendered to the Trustee (after deducting or upon payment of, in each case, the fee of the Trustee set forth in 5.7 for the Surrender of Shares, any expenses for the account of the Registered Owner of such Shares in accordance with the terms and conditions of this Agreement, and any applicable taxes or other governmental charges). At any time after the expiration of 90 days following the date of termination of this Agreement, the Trustee may sell for Dollars the Trust Property for then held under this Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it under this Agreement, unsegregated and without liability for interest, for the pro rata benefit of the

45

Registered Owners of Shares that have not theretofore been Surrendered, such Registered Owners thereupon becoming general creditors of the Trustee with respect to such net proceeds. After making such sale, the Trustee shall be discharged from all obligations under this Agreement, except to account for such net proceeds and other cash (after deducting, in each case, any fees, expenses, taxes or other governmental charges payable by the Trust, the fee of the Trustee for the Surrender of Shares and any expenses for the account of the Registered Owner of such Shares in accordance with the terms and conditions of this Agreement, and any applicable taxes or other governmental charges), and the trust created by this Agreement shall terminate. Upon the termination of this Agreement, the Sponsor shall be discharged from all obligations under this Agreement except for its obligations to the Trustee under Section 6.7 and Section 7.1, each of which shall survive termination of this Agreement. Section 5.6 and this Section 8.1(e) shall also survive termination of this Agreement.

ARTICLE 9

MISCELLANEOUS

Section 9.1 Counterparts.

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Agreement shall be filed with the Trustee and shall be open to inspection by any Registered Owner during the Trustee’s business hours.

Section 9.2 Third-Party Beneficiaries.

This Agreement is for the exclusive benefit of the parties hereto, and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

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Section 9.3 Severability.

In case any one or more of the provisions contained in this Agreement should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall in no way be affected, prejudiced or disturbed thereby.

Section 9.4 Registered Owners, Beneficial Owners and Depositors as Parties; Binding Effect.

The Registered Owners, Beneficial Owners and Depositors from time to time shall be parties to this Agreement and shall be bound by all of the terms and conditions hereof by their acceptance of Shares or any interest therein or by their depositing Japanese Yen, as the case may be.

Section 9.5 Notices.

(a) All notices given under this Agreement must be in writing.

(b) Any and all notices to be given to the Trustee or the Sponsor shall be deemed to have been duly given (i) when it is actually delivered by a messenger or recognized courier service, (ii) five days after it is mailed by registered or certified mail, postage paid or (iii) when receipt of a facsimile transmission is acknowledged via a return receipt or receipt confirmation as requested by the original transmission, in each case to or at the address set forth below:

To the Trustee:

The Bank of New York

101 Barclay Street, 22-W

New York, New York 10286

Attention: ADR Administration

Facsimile: 212-571-3050

or any other place to which the Trustee may have transferred its Corporate Trust Office with notice to the Sponsor.

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To the Sponsor:

Rydex Specialized Products LLC

c/o Rydex Investments

9601 Blackwell Road, Suite 500

Rockville, Maryland 20850

Attention: Carl G. Verboncoeur, President

Facsimile: 301-296-5112

or any other place to which the Sponsor may have transferred its principal office with notice to the Trustee.

(c) Any and all notices to be given to a Registered Owner shall be deemed to have been duly given (i) when actually delivered by messenger or a recognized courier service, (ii) when mailed, postage prepaid or (iii) when sent by facsimile transmission confirmed by letter, in each case at or to the address of such Registered Owner as it appears on the transfer books of the Trustee, or, if such Registered Owner shall have filed with the Trustee a written request that any notice or communication intended for such Registered Owner be delivered to some other address, at the address designated in such request.

Section 9.6 Agent for Service; Submission to Jurisdiction.

The Sponsor hereby (i) irrevocably designates and appoints CT Corporation, in the State of New York, as the Sponsor’s authorized agent upon which process may be served in any suit or proceeding arising out of or relating to the Shares, the Trust Property or this Agreement, (ii) consents and submits to the jurisdiction of any state or federal court in The City of New York, State of New York, in which any such suit or proceeding may be instituted, and (iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Sponsor in any such suit or proceeding. The Sponsor agrees to deliver, upon the execution and delivery of this Agreement, a written acceptance by such agent of its

48

appointment as such agent. The Sponsor further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment in full force and effect for so long as any Shares remain outstanding or this Agreement remains in force. In the event the Sponsor fails to continue such designation and appointment in full force and effect, the Sponsor hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Sponsor at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.

Section 9.7 Governing Law.

This Agreement shall be interpreted under, and all rights and duties under this Agreement shall be governed by, the laws of the State of New York.

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IN WITNESS WHEREOF, RYDEX SPECIALIZED PRODUCTS LLC and THE BANK OF NEW YORK have duly executed this Agreement as of the day and year first set forth above.

RYDEX SPECIALIZED PRODUCTS LLC, as Sponsor
By:
	Name: Title:	Carl G. Verboncoeur Chief Executive Officer and Treasurer
THE BANK OF NEW YORK, as Trustee
By:
	Name: Title:

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EXHIBIT A

Form of Deposit Account Agreement

1

EXHIBIT B

Form of Certificate

THE SHARES EVIDENCED HEREBY REPRESENT RIGHTS WITH RESPECT TO UNDERLYING TRUST PROPERTY (AS DEFINED IN THE TRUST AGREEMENT REFERRED TO HEREIN) HELD BY THE TRUST AND DO NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND ARE NOT GUARANTEED BY THE SPONSOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE SHARES NOR THE UNDERLYING TRUST PROPERTY ARE INSURED UNDER ANY AGREEMENT THAT DIRECTLY BENEFITS THE TRUST OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE AGENT AUTHORIZED BY THE ISSUER FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

2

JAPANESE YEN SHARES

ISSUED BY

CURRENCYSHARES JAPANESE YEN TRUST

REPRESENTING

FRACTIONAL INTERESTS IN DEPOSITED JAPANESE YEN AND ANY OTHER

TRUST PROPERTY

THE BANK OF NEW YORK, as Trustee

No.             * Shares

CUSIP:                     

THE BANK OF NEW YORK, as Trustee (hereinafter called the Trustee), hereby certifies that CEDE & CO., as nominee of the Depository Trust Company, or registered assigns, IS THE OWNER OF * Shares issued by CurrencyShares Japanese Yen Trust, each representing a fractional undivided interest in the net assets of the Trust, as provided in the Agreement referred to below. At the time of delivery of the Agreement, each 50,000 Shares represented an interest in 500,000,000 Japanese Yen that are deposited under the Agreement and held by the Depository referred to in the Agreement. The amount of Japanese Yen in which each 50,000 Shares represents an interest may change from time to time as provided in the Agreement. The Trustee’s Corporate Trust Office is located at a different address than its principal executive office. Its Corporate Trust Office is located at 101 Barclay Street, New York, New York 10286, and its principal executive office is located at One Wall Street, New York, New York 10286.

This Certificate is issued upon the terms and conditions set forth in the Trust Agreement dated as of             , 200            (the “Agreement”) among Rydex Specialized Products LLC d/b/a “Rydex Investments” (herein called the Sponsor), the Trustee, all Registered Owners and Beneficial Owners from time to time of Shares issued thereunder and all Depositors. By becoming a Registered Owner or Beneficial Owner, or by depositing Japanese Yen, a Person becomes a party to the Agreement and is bound by all the terms and conditions of the Agreement. The Agreement sets forth the rights of Depositors and Registered Owners and the rights and duties of the Trustee and the Sponsor. Copies of the Agreement are on file at the Trustee’s Corporate Trust Office in New York City.

* That number of Shares held at The Depository Trust Company at any given point in time.

3

The Agreement is hereby incorporated by reference into and made a part of this Certificate as if set forth in full in this place. Capitalized terms not defined herein shall have the meanings set forth in the Agreement.

This Certificate shall not be entitled to any benefits under the Agreement or be valid or obligatory for any purpose unless it is executed by the Trustee by the manual or facsimile signature of a duly authorized signatory of the Trustee and, if a Registrar (other than the Trustee) for the Shares shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar.

Dated:	THE BANK OF NEW YORK,   as Trustee
	By:
	Its:

THE TRUSTEE’S CORPORATE TRUST OFFICE ADDRESS IS

101 BARCLAY STREET, NEW YORK, NEW YORK 10286

4

EX-4.2

EXHIBIT 4.2

CURRENCYSHARES^SM JAPANESE YEN TRUST

PARTICIPANT AGREEMENT

This Participant Agreement (this “Agreement”), dated as of                     , 200    , is entered into by and between                     (with respect to this Agreement, the “Authorized Participant”, and with respect to the Trust Agreement referred to below, an “Authorized Participant”), The Bank of New York, a New York banking corporation, not in its individual capacity but solely as trustee (the “Trustee”) of the CurrencyShares Japanese Yen Trust (the “Trust”), and Rydex Specialized Products LLC, d/b/a Rydex Investments, as sponsor (the “Sponsor”) of the Trust.

SUMMARY

The Trustee serves as the trustee of the Trust pursuant to the Depositary Trust Agreement dated as of                     , 200     among the Sponsor, the Trustee, the registered owners and beneficial owners from time to time of Japanese Yen Shares issued thereunder and all depositors (the “Trust Agreement”). As provided in the Trust Agreement and described in the Prospectus (defined below), units of fractional undivided beneficial interests in and ownership of the Trust (the “Shares”) may be created or redeemed by the Trustee for an Authorized Participant in aggregations of fifty thousand (50,000) Shares (each aggregation, a “Basket”). Baskets are offered only pursuant to the registration statement of the Trust on Form S-1, as amended (Registration No: 333-            ), as declared effective by the Securities and Exchange Commission (“SEC”) and as the same may be amended from time to time thereafter (collectively, the “Registration Statement”) together with the prospectus of the Trust in the form first filed with the SEC pursuant to Rule 424 (the “Prospectus”) adopted under the Securities Act of 1933, as amended (the “1933 Act”). Under the Trust Agreement, the Trustee is authorized to issue Baskets to, and redeem Baskets from, Authorized Participants under the Trust Agreement, only through the facilities of The Depository Trust Company (“DTC”) or a successor depository, and only in exchange for an amount of Japanese Yen that is transferred between such Authorized Participant and the Trust. Under the Trust Agreement, the Trustee issues Baskets in exchange for Japanese Yen which are transferred by an Authorized Participant to the London Branch of JPMorgan Chase Bank, N.A. (the “Depository”), and when the Trustee redeems Baskets tendered for redemption by an Authorized Participant in exchange for Japanese Yen, the Japanese Yen held in the Trust Account are transferred to the Authorized Participant by the Depository. The foregoing Japanese Yen transfers are also governed by the Deposit Account Agreement the Trust has entered into with the Depository (the “Deposit Account Agreement”). This Agreement sets forth the specific procedures by which an Authorized Participant may create or redeem Baskets.

Because new Shares can be created and issued on an ongoing basis, at any point during the life of the Trust, a “distribution,” as such term is used in the 1933 Act, may be occurring. The Authorized Participant is cautioned that some of its activities may result in its being deemed a participant in a distribution in a manner that would render it a statutory underwriter and subject it to the prospectus-delivery and liability provisions of the 1933 Act. The Authorized Participant should review the “Plan of Distribution” portion of the Prospectus and consult with its own counsel in connection with entering into this Agreement and placing an Order (defined below).

Capitalized terms used but not defined in this Agreement shall have the meanings assigned to such terms in the Trust Agreement. To the extent there is a conflict between any provision of this Agreement and the provisions of the Trust Agreement, the provisions of the Trust Agreement shall control.

To give effect to the foregoing premises and in consideration of the mutual covenants and agreements set forth below, the parties hereto agree as follows:

Section 1. Order Placement. To place orders for the Trustee to create or redeem one or more Baskets, Authorized Participants must follow the procedures for creation and redemption referred to in Section 3 of this Agreement and the procedures described in Attachment A hereto (the “Procedures”), as each may be amended, modified or supplemented from time to time.

Section 2. Status, Representations and Warranties of the Parties.

(a) The Authorized Participant represents and warrants and covenants the following on the date hereof and at each time of purchase by the Authorized Participant of a Basket from the Trust (each such time, the “Time of Purchase”), that:

(i) The Authorized Participant is a participant of DTC (as such a participant, a “DTC Participant”). If the Authorized Participant ceases to be a DTC Participant, the Authorized Participant shall give immediate notice to the Trustee of such event, and this Agreement shall terminate immediately as of the date the Authorized Participant ceased to be a DTC Participant.

(ii) Unless Section 2(a)(iii) applies, the Authorized Participant either (A) is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (“1934 Act”), and is a member in good standing of the National Association of Securities Dealers, Inc. (the “NASD”), or (B) is exempt from being, or otherwise is not required to be, licensed as a broker-dealer or a member of the NASD, and in either case is qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. In connection with the purchase or redemption of Baskets and any related offers or sales of Shares, the Authorized Participant will maintain any such registrations, qualifications and membership in good standing and in full force and effect throughout the term of this Agreement. The Authorized Participant will comply with all applicable federal laws, the laws of the states or other jurisdictions concerned, and the rules and regulations promulgated thereunder, and with the Constitution, By-Laws and Conduct Rules of the NASD (if it is a NASD member), and will not offer or sell Shares in any state or jurisdiction where they may not lawfully be offered and/or sold.

(iii) If the Authorized Participant is offering or selling Shares in jurisdictions outside the several states, territories and possessions of the United States and is not otherwise required to be registered, qualified or a member of the NASD as set forth in Section 2(a)(ii) above, the Authorized Participant will, in connection with such offers and sales, (A) observe the applicable laws of the jurisdiction in which such offer and/or sale is made, (B) comply with the prospectus delivery and other requirements of the 1933 Act, and the regulations promulgated thereunder, and (C) conduct its business in accordance with the NASD Conduct Rules.

(iv) The Authorized Participant is in compliance with the money laundering and related provisions of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, and the regulations promulgated thereunder (“USA PATRIOT Act”), if the Authorized Participant is subject to the requirements of the USA PATRIOT Act.

(v) The Authorized Participant has the capability to send and receive communications via authenticated telecommunication facility to and from the Trustee. The Authorized Participant shall confirm such capability to the satisfaction of the Trustee by the end of the Business Day before placing its first order with the Trustee (whether such order is to create or to redeem Baskets).

(b) The Sponsor represents and warrants that:

(i) on the effective date of the Registration Statement and at each Time of Purchase, the Trust’s Registration Statement shall be effective and no stop order of the SEC with respect thereto shall have been issued and no proceedings for such purpose shall have been instituted or, to the Sponsor’s knowledge, will then be contemplated by the SEC; the Registration Statement complies in all material respects with the requirements of the 1933 Act, and the Prospectus complied as of its date, and complies at the Time of Purchase, in all material respects with the requirements of the 1933 Act; and the conditions to the use of Form S-1 have been satisfied; the Registration Statement does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, the Prospectus will not, as of its date and at the Time of Purchase, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, as of              a.m./p.m. on the date of this Agreement (the “Time of Sale”), the documents comprising the Disclosure Package (as defined below) did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Sponsor makes no warranty or representation with respect to any statement contained in the Registration Statement, the Prospectus or the Disclosure Package in reliance upon and in conformity with information concerning the Authorized Participant and furnished in writing by or on behalf of the Authorized Participant to the Sponsor expressly for use therein. The “Disclosure Package” is the Prospectus and any amendments and supplements thereto at the Time of Sale and any free writing prospectus as defined in Rule 405 of the 1933 Act (a “FWP”) prepared by, for or on behalf of the Sponsor before the Time of Sale and intended for general distribution;

(ii) the Shares, when issued and delivered against payment of consideration therefor, as provided in this Agreement, will be duly and validly authorized, issued, fully paid and non-assessable and free of statutory and contractual preemptive rights, rights of first refusal and similar rights;

(iii) the Sponsor has been duly organized and, on the effective date of the Registration Statement and at each Time of Purchase, will be validly existing as a limited liability company in good standing under the laws of the State of Delaware, with full power and authority to act as the sponsor of the Trust as described in the Registration Statement and the Prospectus, and has all requisite power and authority to execute and deliver this Agreement; and

(iv) at the time the Sponsor makes an offer of Shares following the filing of the Registration Statement, neither the Trust nor the Sponsor will be an “ineligible issuer” as defined in Rule 405 of the 1933 Act.

Section 3. Orders.

(a) All orders to create or redeem Baskets shall be made in accordance with the terms of the Trust Agreement, the Deposit Account Agreement, this Agreement and the Procedures. Each party will comply with such foregoing terms and procedures to the extent applicable to it. The Authorized Participant hereby consents to the use of recorded telephone lines whether or not such use is reflected in the Procedures. The Trustee and Sponsor may issue additional or other procedures from time to time relating to the manner of creating or redeeming Baskets which are not related to the Procedures, and the Authorized Participant will comply with such procedures of which it has received notice in accordance with Section 18(c).

(b) The Authorized Participant acknowledges and agrees that each order to create a Basket (a “Purchase Order”) and each order to redeem a Basket (a “Redemption Order”, and each Purchase Order and Redemption Order, an “Order”) may not be revoked by the Authorized Participant upon its delivery to the Trustee. A form of Purchase Order is attached hereto as Exhibit B and a form of Redemption Order is attached hereto as Exhibit C.

(c) The delivery of the Shares against deposits of Japanese Yen may be suspended generally, or refused with respect to particular requested deliveries, during any period when the transfer books of the Trustee are closed or if any such action is deemed necessary or advisable by the Trustee or the Sponsor for any reason at any time or from time to time. Except as otherwise provided in the Trust Agreement, the surrender of Shares for purposes of withdrawing Japanese Yen may not be suspended.

Section 4. Japanese Yen Transfers. Any Japanese Yen to be transferred in connection with any Order shall be transferred between the Authorized Participant’s account and the Trust’s deposit accounts established for such transfers pursuant to the Deposit Account Agreement (the “Deposit Accounts”) in accordance with the Procedures. The Authorized Participant shall be responsible for all costs and expenses relating to or connected with any transfer of Japanese Yen between its account and the Deposit Accounts, including any late fees and other charges, if any, for which the Trustee becomes responsible in the event that Japanese Yen are not transferred from the Authorized Participant’s account in accordance with the Procedures.

Section 5. Fees. In connection with each Order by an Authorized Participant to create or redeem one or more Baskets, the Trustee shall charge, and the Authorized Participant shall pay to the Trustee, the transaction fee prescribed in the Trust Agreement applicable to such creation or redemption. The initial transaction fee shall be five hundred dollars ($500). The transaction fee may be waived or otherwise adjusted from time to time as set forth in the Prospectus.

Section 6. Authorized Persons. Concurrently with the execution of this Agreement and from time to time thereafter, the Authorized Participant shall deliver to the Trustee notarized and duly certified as appropriate by its secretary or other duly authorized official, a certificate in the form of Exhibit A setting forth the names and signatures of all persons authorized to give instructions relating to activity contemplated hereby or by any other notice, request or instruction given on behalf of the Authorized Participant (each, an “Authorized Person”). The Trustee may accept and rely upon such certificate as conclusive evidence of the facts set forth therein and shall consider such certificate to be in full force and effect until the Trustee receives a superseding certificate bearing a subsequent date. Upon the termination or revocation of authority of any Authorized Person by the Authorized Participant, the Authorized Participant shall give immediate written notice of such fact to the Trustee and such notice shall be effective upon receipt by the Trustee. The Trustee shall issue to each Authorized Person a unique personal identification number (the “PIN”) by which such Authorized Person shall be identified and by which instructions issued by the Authorized Participant hereunder shall be authenticated. The PIN shall be kept confidential by the Authorized Participant and shall only be provided to the Authorized Person. If, after issuance, the Authorized Person’s PIN is changed, the new PIN shall become effective on a date mutually agreed upon by the Authorized Participant and the Trustee.

Section 7. Redemption. The Authorized Participant represents and warrants that it will not obtain an Order Number (as described in the Procedures) from the Trustee for the purpose of redeeming a Basket unless it first ascertains that (i) it owns outright or has full legal authority and legal and beneficial right to tender for redemption the Baskets to be redeemed and to receive the entire proceeds of the redemption, and (ii) such

Baskets have not been loaned or pledged to another party and are not the subject of a repurchase agreement, securities lending agreement or any other arrangement which would preclude the delivery of such Baskets to the Trustee on the third Business Day following the date of the Redemption Order.

Section 8. Role of Authorized Participant.

(a) The Authorized Participant acknowledges that, for all purposes of this Agreement and the Trust Agreement, the Authorized Participant is and shall be deemed to be an independent contractor and has and shall have no authority to act as agent for the Trust, the Sponsor, the Trustee or the Depository, in any matter or in any respect.

(b) The Authorized Participant will make itself and its employees available, upon request, during normal business hours to consult with the Trustee, the Depository or their designees concerning the performance of the Authorized Participant’s responsibilities under this Agreement.

(c) The Authorized Participant will maintain records of all sales of Shares made by or through it as required by law and will furnish copies of such records to the Sponsor upon the reasonable request of the Sponsor, subject to any privacy or confidentiality obligations it may have to its customers arising under federal or state securities laws or the applicable rules of any self regulatory organization. The Sponsor will not use any information provided by the Authorized Participant pursuant to this paragraph or disclose such information to others except in connection with the performance of its duties and responsibilities hereunder, including making servicing and informational mailings related to the Trust, or except as may be required by applicable law.

Section 9. Indemnification.

(a) The Authorized Participant hereby indemnifies and holds harmless the Trustee, the Depository, the Trust, the Sponsor, their respective direct or indirect affiliates (as defined below) and their respective directors, officers, employees and agents (each, an “AP Indemnified Party”) from and against any losses, liabilities, damages, costs and expenses (including attorney’s fees and the reasonable cost of investigation) incurred by such AP Indemnified Party as a result of or in connection with: (i) any breach by the Authorized Participant of any provision of this Agreement, including any of its representations, warranties or covenants; (ii) any failure on the part of the Authorized Participant to perform any of its other obligations set forth in this Agreement; (iii) any failure by the Authorized Participant to comply with applicable laws and the rules and regulations of any governmental entity or any self-regulatory organization; (iv) any actions of such AP Indemnified Party in reliance upon any instructions issued in accordance with the Procedures reasonably believed by the AP Indemnified Party to be genuine and to have been given by the Authorized Participant; or (v) (A) any representation by the Authorized Participant, its employees or its agents or other representatives about the Shares, any AP Indemnified Party or the Trust that is not consistent with the Trust’s Prospectus as then-supplemented made in connection with the offer or the solicitation of an offer to buy or sell Shares and (B) any untrue statement or alleged untrue statement of a material fact (1) contained in any research report, marketing material or sales literature described in Section 13(b) or in any FWP prepared by the Authorized Participant or (2) furnished by the Authorized Participant for use in a FWP prepared by, for or on behalf of the Sponsor, or any alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading to the extent that such statement or omission relates to the Shares, any AP Indemnified Party or the Trust, unless, in either case, such representation, statement or omission was made or included by the Authorized Participant at the written direction of the Sponsor or is based upon any omission or alleged omission by the Sponsor to state a material fact in connection with such representation, statement or omission necessary in order to make such representation, statement or omission not misleading.

(b) The Sponsor hereby agrees to indemnify and hold harmless the Authorized Participant, its respective subsidiaries, affiliates, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each, a

“Sponsor Indemnified Party”) from and against any losses, liabilities, damages, costs and expenses (including attorneys’ fees and the reasonable cost of investigation) incurred by such Sponsor Indemnified Party as a result of (i) any breach by the Sponsor of any provision of this Agreement that relates to the Sponsor, including its representations, warranties and covenants; (ii) any failure on the part of the Sponsor to perform any other obligation of the Sponsor set forth in this Agreement; (iii) any failure by the Sponsor to comply with applicable laws; or (iv) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or in any amendment thereof, or in the Prospectus, or in any amendment thereof or supplement thereto, or in any FWP prepared by, for or on behalf of the Sponsor, or arising out of or based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, except those statements based on information furnished in writing by or on behalf of the Authorized Participant expressly for use in the Registration Statement, amendment thereof, Prospectus, amendment thereof or supplement thereto, or FWP.

(c) (i) This Section 9 shall not apply to any AP Indemnified Party or any Sponsor Indemnified Party (each, an “Indemnified Party”) to the extent any such losses, liabilities, damages, costs and expenses are incurred as a result of, or in connection with, any action or failure to act that constitutes gross negligence, bad faith or willful misconduct on the part of the such Indemnified Party. (ii) The term “affiliate” in this Section 9 shall include, with respect to any person, entity or organization, any other person, entity or organization which directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, entity or organization.

(d) If the indemnification provided for in this Section 9 is unavailable to an indemnified party under Sections 9(a) or 9(b) or insufficient to hold an indemnified party harmless in respect of any losses, liabilities, damages, costs and expenses referred to therein, then each applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, liabilities, damages, costs and expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Sponsor and the Trust, on the one hand, and by the Authorized Participant, on the other hand, from the services provided hereunder or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Sponsor and the Trust, on the one hand, and of the Authorized Participant, on the other hand, in connection with, to the extent applicable, the statements or omissions which resulted in such losses, liabilities, damages, costs and expenses, as well as any other relevant equitable considerations. The relative benefits received by the Sponsor and the Trust, on the one hand, and the Authorized Participant, on the other hand, shall be deemed to be in the same respective proportions as the amount of Japanese Yen transferred to the Trust under this Agreement on the one hand (expressed in dollars) bears to the amount of economic benefit received by the Authorized Participant in connection with this Agreement on the other hand. To the extent applicable, the relative fault of the Sponsor on the one hand and of the Authorized Participant on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Sponsor or by the Authorized Participant and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, liabilities, damages, costs and expenses referred to in this Section 9(d) shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any action, suit or proceeding (each a “Proceeding”) related to such losses, liabilities, damages, costs and expenses.

(e) The Sponsor and the Authorized Participant agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in Section 9(d) above. The Authorized Participant shall not be required to contribute any amount in

excess of the amount by which the total price at which the Shares created by the Authorized Participant and distributed to the public were offered to the public exceeds the amount of any damage which the Authorized Participant has otherwise been required to pay by reason of such untrue statement or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(f) The indemnity and contribution agreements contained in this Section 9 shall remain in full force and effect regardless of any investigation made by or on behalf of the Authorized Participant, its partners, stockholders, members, directors, officers, employees and or any person (including each partner, stockholder, member, director, officer or employee of such person) who controls the Authorized Participant within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, or by or on behalf of the Sponsor, its partners, stockholders, members, directors, officers, employees or any person who controls the Sponsor within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and shall survive any termination of this Agreement. The Sponsor and the Authorized Participant agree promptly to notify each other of the commencement of any Proceeding against it and, in the case of the Sponsor, against any of the Sponsor’s officers or directors, in connection with the issuance and sale of the Shares or in connection with the Registration Statement or the Prospectus.

Section 10. Liability.

(a) Limitation of Liability. None of the Sponsor, the Trustee, the Authorized Participant, and the Depository shall be liable to each other or to any other person, including any party claiming by, through or on behalf of the Authorized Participant, for any losses, liabilities, damages, costs or expenses arising out of any mistake or error in data or other information provided to any of them by each other or any other person or out of any interruption or delay in the electronic means of communications used by them.

(b) Tax Liability. The Authorized Participant shall be responsible for the payment of any transfer tax, sales or use tax, stamp tax, recording tax, value added tax and any other similar tax or government charge applicable to the creation or redemption of any Basket made pursuant to this Agreement, regardless of whether or not such tax or charge is imposed directly on the Authorized Participant. To the extent the Trustee, the Sponsor or the Trust is required by law to pay any such tax or charge, the Authorized Participant agrees to promptly indemnify such party for any such payment, together with any applicable penalties, additions to tax or interest thereon.

Section 11. Acknowledgment. The Authorized Participant acknowledges receipt of (i) a copy of the Trust Agreement and (ii) the current Prospectus of the Trust, and represents that it has reviewed and understands such documents.

Section 12. Effectiveness and Termination. Upon the execution of this Agreement by the parties hereto, this Agreement shall become effective in this form as of the Time of Sale, and may be terminated at any time by any party upon thirty (30) days prior written notice to the other parties unless earlier terminated: (i) in accordance with Section 2(a)(i); (ii) upon notice to the Authorized Participant by the Trustee in the event of a breach by the Authorized Participant of this Agreement or the procedures described or incorporated herein; (iii) immediately in the circumstances described in Section 18(j); or (iv) at such time as the Trust is terminated pursuant to the Trust Agreement.

Section 13. Marketing Materials; Representations Regarding Shares; Identification in Registration Statement.

(a) The Authorized Participant represents, warrants and covenants that (i), without the written consent of the Sponsor, the Authorized Participant will not (A) make, or permit any of its representatives to make, any representations concerning the Shares or any AP Indemnified Party other than representations contained (1) in the Prospectus of the Trust, as then amended and

supplemented, (2) in printed information approved by the Sponsor as information supplemental to such Prospectus or (3) in any promotional materials or sales literature furnished to the Authorized Participant by the Sponsor, or (B) issue any FWP pursuant to Rules 164 and 433 of the 1933 Act and (ii) the Authorized Participant will not furnish or cause to be furnished to any person or display or publish any information or material relating to the Shares, any AP Indemnified Person or the Trust that are not consistent with the Prospectus, as then amended and supplemented. Copies of the Prospectus of the Trust, as then amended and supplemented, and any such printed supplemental information will be supplied by the Sponsor to the Authorized Participant in reasonable quantities upon request.

(b) Notwithstanding the foregoing, the Authorized Participant may without the written approval of the Sponsor prepare and circulate in the regular course of its business research reports, marketing material and sales literature, but in no event FWPs, that include information, opinions or recommendations relating to the Shares (i) for public dissemination, provided that such research reports, marketing material or sales literature is prepared in accordance with applicable rules and regulations of the 1933 Act, any applicable state securities laws and NASD rules; or (ii) for internal use by the Authorized Participant. The Authorized Participant will file all such research reports, marketing material and sales literature related to the Shares with the NASD to the extent required by the NASD Conduct Rules.

(c) The Authorized Participant and its affiliates may prepare and circulate in the regular course of their businesses, without having to refer to the Shares or the Prospectus, as then amended and supplemented, data and information relating to the price of Japanese Yen.

(d) The Authorized Participant hereby agrees that for the term of this Agreement the Sponsor may deliver the Prospectus, and any supplements or amendments thereto or recirculation thereof, to the Authorized Participant in Portable Document Format (“PDF”) via electronic mail in lieu of delivering the Prospectus in paper form. The Authorized Participant may revoke the foregoing agreement at any time by delivering written notice to the Sponsor and, whether or not such agreement is in effect, the Authorized Participant may, at any time, request reasonable quantities of the Prospectus, and any supplements or amendments thereto or recirculation thereof, in paper form from the Sponsor. The Authorized Participant acknowledges that it has the capability to access, view, save and print material provided to it in PDF and that it will incur no appreciable extra costs by receiving the Prospectus in PDF instead of in paper form. The Sponsor will, when requested by the Authorized Participant, make available at no cost the software and technical assistance necessary to allow the Authorized Participant to access, view and print the PDF version of the Prospectus.

(e) For as long as this Agreement is effective, the Authorized Participant agrees to be identified as an authorized participant of the Trust (i) in the section of the Prospectus included within the Registration Statement entitled “Creation and Redemption of Shares” (including identifying the Authorized Participant in such section by a supplement to the Prospectus) and in any other section as may be required by the SEC and (ii) on the Trust’s website. Upon the termination of this Agreement, (i) during the period prior to when the Sponsor qualifies and elects to file on Form S-3, the Sponsor will remove such identification from the Prospectus in the amendment of the Registration Statement next occurring after the date of the termination of this Agreement and, during the period after when the Sponsor qualifies and elects to file on Form S-3, the Sponsor will promptly file a current report on Form 8-K indicating the withdrawal of the Authorized Participant as an authorized participant of the Trust and (ii) the Sponsor will promptly update the Trust’s website to remove any identification of the Authorized Participant as an authorized participant of the Trust.

Section 14. Title To Japanese Yen. The Authorized Participant represents and warrants that upon delivery of the Basket Japanese Yen Amount (as defined in the Trust Agreement) to the Trustee in accordance with the terms of the Trust Agreement and this Agreement, the Trust will acquire good and unencumbered title to the Japanese Yen which are the subject of such Basket Japanese Yen Amount, free and clear of all

pledges, security interests, liens, charges, taxes, assessments, encumbrances, equities, claims, options or limitations of any kind or nature, fixed or contingent, and not subject to any adverse claims, including any restriction upon the sale or transfer of all or any part of such Japanese Yen which is imposed by any agreement or arrangement entered into by the Authorized Participant or any party for which it is acting in connection with a Purchase Order.

Section 15. Third Party Beneficiaries. Each AP Indemnified Party, to the extent it is not a party to this Agreement, is a third-party beneficiary of this Agreement (each, a “Third Party Beneficiary”) and may proceed directly against the Authorized Participant (including by bringing proceedings against the Authorized Participant in its own name) to enforce any obligation of the Authorized Participant under this Agreement which directly or indirectly benefits such Third Party Beneficiary.

Section 16. Force Majeure. No party to this Agreement shall incur any liability for any delay in performance, or for the non-performance, of any of its obligations under this Agreement by reason of any act of God or war or terrorism, acts and regulations and rules of any governmental or supra national bodies or authorities or regulatory or self-regulatory organization or failure of any such body, authority or organization for any reason, to perform its obligations, or any cause beyond its reasonable control, including, without limitation, any breakdown, malfunction or failure of transmission in connection with or other unavailability of any wire, communication or computer facilities, any transport, port or airport disruption, or any industrial action.

Section 17. Ambiguous Instructions. If a Purchase Order Form or a Redemption Order Form otherwise in good form contains order terms that differ from the information provided in the telephone call at the time of issuance of the applicable order number, the Trustee will attempt to contact one of the Authorized Persons of the Authorized Participant to request confirmation of the terms of the Order. If an Authorized Person confirms the terms as they appear in the Order, then the Order will be accepted and processed. If an Authorized Person contradicts the Order terms, the Order will be deemed invalid, and a corrected Order must be received by the Trustee. If the Trustee is not able to contact an Authorized Person, then the Order shall be accepted and processed in accordance with its terms notwithstanding any inconsistency from the terms of the telephone information. In the event that an Order contains terms that are not complete or are illegible, the Order will be deemed invalid and the Trustee will attempt to contact one of the Authorized Persons of the Authorized Participant to request retransmission of the Order.

Section 18. Miscellaneous.

(a) Amendment and Modification. This Agreement, the Procedures attached as Attachment A and the Exhibits hereto may be amended, modified or supplemented by the Trustee and the Sponsor, without consent of any Authorized Participant from time to time by the following procedure. After the amendment, modification or supplement has been agreed to, the Trustee will mail a copy of the proposed amendment, modification or supplement to the Authorized Participant. For the purposes of this Agreement, mail will be deemed received by the recipient thereof on the third (3rd) day following the deposit of such mail into the United States postal system. Within ten (10) calendar days after its deemed receipt, the amendment, modification or supplement will become part of this Agreement, the Attachments or the Exhibits, as the case may be, in accordance with its terms. If at any time there is any material amendment, modification or supplement of any Participant Agreement (other than this Agreement), the Trustee will promptly mail a copy of such amendment, modification or supplement to the Authorized Participant.

(b) Waiver of Compliance. Any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but any such written waiver, or the failure to insist upon strict compliance with any obligation, covenant, agreement or condition herein, shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

(c) Notices. Except as otherwise specifically provided in this Agreement, all notices required or permitted to be given pursuant to this Agreement shall be given in writing and delivered by personal delivery, by postage prepaid registered or certified United States first class mail, return receipt requested, by nationally recognized overnight courier (delivery confirmation received) or by telex, telegram or telephonic facsimile or similar means of same day delivery (transmission confirmation received), with a confirming copy regular mailed, postage prepaid. For avoidance of doubt, notices may not be given or transmitted by electronic mail. Unless otherwise notified in writing, all notices to the Trust shall be given or sent to the Trustee. All notices shall be directed to the address or telephone or facsimile numbers indicated below the signature line of the parties on the signature page hereof.

(d) Successors and Assigns. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

(e) Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party without the prior written consent of the other parties, except that any entity into which a party hereto may be merged or converted or with which it may be consolidated or any entity resulting from any merger, conversion, or consolidation to which such party hereunder shall be a party, or any entity succeeding to all or substantially all of the business of the party, shall be the successor of the party under this Agreement. The party resulting from any such merger, conversion, consolidation or succession shall notify the other parties hereto of the change. Any purported assignment in violation of the provisions hereof shall be null and void. Notwithstanding the foregoing, this Agreement shall be automatically assigned to any successor Trustee or Sponsor at such time such successor qualifies as a successor Trustee or Sponsor under the terms of the Trust Agreement.

(f) Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable New York conflict of laws principles) as to all matters, including matters of validity, construction, effect, performance and remedies. Each party hereto irrevocably consents to the jurisdiction of the courts of the State of New York and of any federal court located in the Borough of Manhattan in such State in connection with any action, suit or other proceeding arising out of or relating to this Agreement or any action taken or omitted hereunder, and waives any claim of forum non convenient and any objections as to laying of venue. Each party further waives personal service of any summons, complaint or other process and agrees that service thereof may be made by certified or registered mail directed to such party at such party’s address for purposes of notices hereunder. Each party hereby waives its right to a trial by jury of any claim arising under or in connection with this Agreement.

(g) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement, and it shall not be necessary in making proof of this Agreement as to any party hereto to produce or account for more than one such counterpart executed and delivered by such party.

(h) Interpretation. The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.

(i) Entire Agreement. This Agreement and the Trust Agreement, along with any other agreement or instrument delivered pursuant to this Agreement and the Trust Agreement, supersede all prior agreements and understandings between the parties with respect to the subject matter hereof, provided, however, that the Authorized Participant shall not be deemed by this provision to be a party to the Trust Agreement.

(j) Severance. If any provision of this Agreement is held by any court or any act, regulation, rule or decision of any other governmental or supra national body or authority or regulatory or self-regulatory organization to be invalid, illegal or unenforceable for any reason, it shall be invalid, illegal or unenforceable only to the extent so held and shall not affect the validity, legality or enforceability of the other provisions of this Agreement and this Agreement will be construed as if such invalid, illegal, or unenforceable provision had never been contained herein, unless the Sponsor determines in its discretion, after consulting with the Trustee, that the provision of this Agreement that was held invalid, illegal or unenforceable does affect the validity, legality or enforceability of one or more other provisions of this Agreement, and that this Agreement should not be continued without the provision that was held invalid, illegal or unenforceable, and in that case, upon the Sponsor’s notification of the Trustee of such a determination, this Agreement shall immediately terminate and the Trustee will so notify the Authorized Participant immediately.

(k) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

(l) Survival. Sections 9 (Indemnification) and 15 (Third Party Beneficiaries) hereof shall survive the termination of this Agreement.

(m) Other Usages. The following usages shall apply in interpreting this Agreement: (i) references to a governmental or quasigovernmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of such agency, authority or instrumentality; and (ii) “including” means “including, but not limited to.”

* * * * * * *

IN WITNESS WHEREOF, the Authorized Participant, the Sponsor and the Trustee, on behalf of the Trust, have caused this Agreement to be executed by their duly authorized representatives as of the date first set forth above.

THE BANK OF NEW YORK, not in its individual capacity, but solely as Trustee of the CurrencyShares Japanese Yen Trust		[AUTHORIZED PARTICIPANT]
By:		By:
	Name:		Name:
	Title		Title
Address:		Address:
Telephone:		Telephone:
Facsimile:		Facsimile:

RYDEX SPECIALIZED PRODUCTS LLC,

Sponsor of the CurrencyShares Japanese Yen Trust

Name:

Title:

Address:

Telephone:

Facsimile:

EXHIBIT A

CURRENCYSHARES^SM JAPANESE YEN TRUST

FORM OF CERTIFIED AUTHORIZED PERSONS OF AUTHORIZED PARTICIPANT

The following are the names, titles and signatures of all persons (each an “Authorized Person”) authorized to give instructions relating to any activity contemplated by the Participant Agreement or any other notice, request or instruction on behalf of the Authorized Participant pursuant to the CurrencyShares Japanese Yen Trust Participant Agreement.

Authorized Participant:
Name:	Name:
Title:	Title:
Signature:	Signature:
Name:	Name:
Title:	Title:
Signature:	Signature:

The undersigned, [name], [title] of [company], does hereby certify that the persons listed above have been duly elected to the offices set forth beneath their names, that they presently hold such offices, that they have been duly authorized to act as Authorized Persons pursuant to the CurrencyShares Japanese Yen Trust Participant Agreement by and between [Authorized Participant] and the Trustee and the Sponsor of the CurrencyShares Japanese Yen Trust, dated [            ], and that their signatures set forth above are their own true and genuine signatures.

In Witness Whereof, the undersigned has hereby set his/her hand on the date set forth below.

Subscribed and sworn to before me this              day of     , 20	By:
	Name:
	Title:
Notary Public	Date:

EXHIBIT B

CURRENCYSHARES^SM JAPANESE YEN TRUST

PURCHASE ORDER FORM

THE BANK OF NEW YORK, TRUSTEE

CONTACT INFORMATION FOR ORDER EXECUTION:

Telephone order number:	(718) 315-4970 or 4967
Fax order number:	(718) 315-4881
	[            ]
	Acc: JPMorgan Chase Bank, N.A. London (CHASGB2L) No: [            ] FFC: Currency Shares Japanese Yen Trust [            ] IBAN# [            ]

Participant must complete all items in Part I. The Trustee, in its discretion may reject any order not submitted in complete form.

I. TO BE COMPLETED BY PARTICIPANT:

Date:________________________________	Time:_________ ________________
Broker Name:_________________________	Firm Name:____________________
DTC Participant Number:________________	Fax Number:___________________
Telephone Number:____________________
	(One Basket = 50,000 FXY Shares)
	Number of Baskets Transacted:______________
Order #______________________________	Number written out:_____________

This Purchase Order is subject to the terms and conditions of the Depositary Trust Agreement of the CurrencyShares Japanese Yen Trust as currently in effect and the Participant Agreement between the Authorized Participant, the Trustee and the Sponsor named therein. All representations and warranties of the Authorized Participant set forth in such Depositary Trust Agreement and such Participant Agreement are incorporated herein by reference and are true and accurate as of the date hereof.

The undersigned does hereby certify as of the date set forth below that he/she is an Authorized Person under the Participant Agreement and that he/she is authorized to deliver this Purchase Order to the Trustee on behalf of the Authorized Participant. The Authorized Participant enters into this agreement based on an estimated Basket Japanese Yen Amount disseminated the previous business day and recognizes the final Basket Japanese Yen Amount represented will be decreased based on the Trust’s daily accrual. At the conclusion of the trading day a final NAV will be disseminated to all Authorized Participants, and the Basket Japanese Yen Amount required for the Purchase Order entered into on this day will be finalized and this Purchase Order will serve as a legally binding contract for settlement on the third New York business day following the date hereof, unless that day is not a business day in Japan, in which case settlement will be the next following day that is a business day in both New York and Japan.

Date Authorized Person’s Signature

II. TO BE COMPLETED BY TRUSTEE:

This certifies that the above order has been:

_________Accepted by the Trustee

_________Declined-Reason:_______________________________________________

Final # of Japanese Yen___________________		Final # of FXY Shares________
___________________________	________	____________________________________
Date	Time	Authorized Signature of Trustee

EXHIBIT C

CURRENCYSHARES JAPANESE YEN TRUST

REDEMPTION ORDER FORM

THE BANK OF NEW YORK, TRUSTEE

CONTACT INFORMATION FOR ORDER EXECUTION:

Telephone order number:	(718) 315-4970 or 4967
Fax order number:	(718) 315-4881
Depository Instructions

Participant must complete all items in Part I. The Trustee, in its discretion may reject any order not submitted in complete form.

I. TO BE COMPLETED BY PARTICIPANT:

Date:________________________________	Time:_________ ________________
Broker Name:_________________________	Firm Name:____________________
DTC Participant Number:________________	Fax Number:___________________
Telephone Number:____________________
	(One Basket = 50,000 FXY Shares)
	Number of Baskets Surrendered:______________
Order #______________________________	Number written out:_____________

This Redemption Order is subject to the terms and conditions of the Depositary Trust Agreement of the CurrencyShares Japanese Yen Trust as currently in effect and the Participant Agreement between the Authorized Participant, the Trustee and the Sponsor named therein. All representations and warranties of the Authorized Participant set forth in such Depositary Trust Agreement and such Participant Agreement are incorporated herein by reference and are true and accurate as of the date hereof.

The undersigned does hereby certify as of the date set forth below that he/she is an Authorized Person under the Participant Agreement and that he/she is authorized to deliver this Redemption Order to the Trustee on behalf of the Authorized Participant. The Authorized Participant enters into this agreement based on an estimated Basket Japanese Yen Amount disseminated the previous business day and recognizes the final Basket Japanese Yen Amount represented will be decreased based on the Trust’s daily accrual. At the conclusion of the trading day a final NAV will be disseminated to all Authorized Participants, and the Basket Japanese Yen Amount required for the Redemption Order entered into on this day will be finalized and this Redemption Order will serve as a legally binding contract for settlement on the third New York business day following the date hereof, unless that day is not a business day in Japan, in which case settlement will be the next following day that is a business day in both New York and Japan.

Date Authorized Person’s Signature

II. TO BE COMPLETED BY TRUSTEE:

This certifies that the above order has been:

_________Accepted by the Trustee

_________Declined-Reason:_______________________________________________

Final # of Japanese Yen___________________		Final # of FXY Shares________
___________________________	________	____________________________________
Date	Time	Authorized Signature of Trustee

ATTACHMENT A

CREATION AND REDEMPTION OF JAPANESE YEN SHARES AND

RELATED JAPANESE YEN TRANSACTIONS

Scope of Procedures and Overview

These procedures (the “Procedures”) describe the processes by which one or more Baskets of Japanese Yen Trust shares (the “Shares”) issuable by The Bank of New York, as trustee (the “Trustee”) of the CurrencyShares Japanese Yen Trust (the “Trust”), may be purchased or, once Shares have been issued, redeemed by an Authorized Participant. Shares may be created or redeemed only in blocks of 50,000 Shares (each such block, a “Basket”). Because the issuance and redemption of Baskets also involve the transfer of Japanese Yen between the Authorized Participant and the Trust, certain processes relating to the underlying transfers of Japanese Yen also are described.

Under these Procedures, Baskets may be issued only in consideration for Japanese Yen transferred to and held in the Trust’s accounts maintained in London, England by London Branch of JPMorgan Chase Bank, N.A., as depository (the “Depository”). Capitalized terms used in these Procedures without further definition have the meanings assigned to them in the Depositary Trust Agreement, dated as of [            ], 200__, between Rydex Specialized Products LLC (the “Sponsor”), the Trustee, the registered owners and beneficial owners from time to time of Shares issued thereunder and all depositors (the “Trust Agreement”), or the Participant Agreement entered into by each Authorized Participant with the Sponsor and the Trustee.

For purposes of these Procedures, a “NY Business Day” is defined as any day other than (i) a Saturday or Sunday or (ii) a day on which the New York Stock Exchange (the “NYSE”) is not open for regular trading at noon New York City time, and a “Local Business Day” is defined as any day other than (i) a Saturday or Sunday or (ii) a day which has been designated a bank holiday in Japan.

The Prospectus describes the creation and redemption process and the Trust; it will be delivered by the Sponsor to each Authorized Participant prior to its execution of the Participant Agreement. Baskets are issued and redeemed in accordance with the Trust Agreement and the Participant Agreement. Baskets may be issued and redeemed by the Trustee on any NY Business Day that is also a Local Business Day in exchange for Japanese Yen, which the Trustee receives from Authorized Participants or transfers to Authorized Participants, in each case on behalf of the Trust. Authorized Participants will be required to pay a nonrefundable per order transaction fee of $500 to the Trustee (the “Transaction Fee”).

Authorized Participants and the Trust Transfer Japanese Yen and Baskets of Shares

Upon acceptance of the Participant Agreement by the Sponsor and the Trustee, the Trustee will assign a personal identification number (a “PIN”) to each person authorized to act for the Authorized Participant (an “Authorized Person”). This will allow the Authorized Participant through its Authorized Person(s) to place Purchase Order(s) or Redemption Order(s) (each as defined herein and, together, “Orders”) for Baskets.

Important Notes:

• Any Order is subject to rejection by the Trustee for the reasons set forth in the Trust Agreement.

• All Orders are subject to the provisions of the Participant Agreement relating to unclear or ambiguous instructions.

CREATION PROCESS

OVERVIEW

The following describes the process by which Baskets are created. In summary, an order to purchase one or more Baskets of Shares is placed by an Authorized Participant with the Trustee by [___ a.m/p.m.] New York City (“NYC”) time on the NY Business Day that is the Order Date under the Trust Agreement (“CREATION T”), and a Basket is created on the third NY Business Day following CREATION T, unless that day is not a Local Business Day, in which case creation of the Basket shall be the next following day that is both a New York Business Day and a Local Business Day (“CREATION T+3”). In order for the creation of a Basket to occur, the Authorized Participant must transfer to the Trust Japanese Yen and the Trustee will transfer to the Authorized Participant’s account at The Depository Trust Company (“DTC”) Baskets corresponding to the Japanese Yen the Participant has transferred to the Trust.

C1 CREATION T (PURCHASE ORDER TRADE DATE)

C1.1 By the [___ a.m/p.m.] NYC time (the “Order Cut-Off Time”), the Authorized Participant submits to the Trustee the Authorized Participant’s order to create one or more Baskets of Shares (a “Purchase Order”) in accordance with the following process.

C1.1.1 By the Order Cut-Off Time, an Authorized Person of the Authorized Participant calls the Trustee at 718-315-4970 or 4967, notifying the Trustee that the Authorized Participant wishes to place a Purchase Order for the Trustee to create an identified number of Baskets of Shares and requesting that the Trustee provide an order number. The Authorized Person provides a PIN as identification to the Trustee.

C1.1.2 Incoming telephone calls are queued and will be handled in the sequence received. The Trustee will process Purchase Orders if the phone call initiated by the Authorized Person is placed before the Order Cut-Off Time, even though the remainder of the order process is not completed until after the Order Cut-Off Time. Accordingly, do not hang up and redial.

C1.1.3 Purchase Orders initiated after the Order Cut-Off Time will be rejected.

C1.1.4 During the phone call from the Authorized Person of the Authorized Participant to initiate a Purchase Order, the Trustee will give an order number for the Authorized Participant’s Purchase Order.

C1.1.5 Within 15 minutes after receiving the order number from the Trustee, the Authorized Participant will fax the Purchase Order to the Trustee using the Purchase Order Form included as part of the Participant Agreement.

C1.1.6 The Purchase Order Form provides, among other things, for the number of Baskets that the Authorized Participant is ordering and the condition that the Purchase Order is subject to the Trustee’s receipt of the Transaction Fee (by DTC SPO Charge) prior to delivery of the Baskets on CREATION T+3.

C1.1.7 If the Trustee has not received the Purchase Order Form from the Authorized Participant within 15 minutes after the Authorized Person placed the phone call to the Trustee, the Trustee places a phone call to the Authorized Participant to inquire about the status of the order. If the Authorized Participant does not fax the Purchase Order Form to the Trustee within 15 minutes after the Trustee’s phone call, the Authorized Participant’s order is cancelled, but the Authorized Participant will remain liable to the Trustee for the Transaction Fee.

C1.2 If the Trustee has received the Authorized Participant’s Purchase Order Form on time in accordance with the preceding timing rules, then by [___ a.m/p.m.] NYC time on CREATION T, the Trustee will return to the Participant a copy of the Purchase Order Form submitted, marking it “Affirmed

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subject to receipt of the Transaction Fee prior to delivery of Baskets on CREATION T+3” and indicating, on a preliminary basis subject to confirmation, the number of Japanese Yen the Participant must transfer in exchange for the Basket(s).

C1.3 The Participant ensures that by [___ a.m/p.m.] [            ] time (usually [___ a.m/p.m.] NYC time) on CREATION T+3 that sufficient Japanese Yen are wire transferred to the Depository.

C1.4 NOTES FOR AUTHORIZED PARTICIPANT (CREATION T)

C1.4.1 The Authorized Participant must be a participating member of DTC.

C1.4.2 The Authorized Participant must be able to transfer Japanese Yen via (RTGSplus, EBA EURO1 or TARGET). SWIFT BIC – CHASGB2L.

C1.4.3 The Authorized Participant must have signed and delivered the Participant Agreement to the Trustee. The Trustee will accept an Authorized Participant based on the representations made by the Authorized Participant in the Participant Agreement. The Trustee will not perform other due diligence or investigation of Authorized Participants.

C1.4.4 The Authorized Participant must have in place, before a Purchase Order can be processed, account instructions for Japanese Yen transfers with its sending financial institution.

C1.4.5 By [___ a.m/p.m.] [            ] time on CREATION T+3, Japanese Yen in the amount needed to acquire the Shares must be standing to the credit of the Deposit Account in order for the Authorized Participant to receive Baskets on CREATION T+3.

C1.4.6 An Authorized Participant may only deliver Japanese Yen for credit to the Depository in the following ways (RTGSplus, EBA EURO1 or TARGET). SWIFT BIC – CHASGB2L.

C1.4.7 Prior to the delivery of the Baskets by the Trustee on CREATION T+3, the Authorized Participant must accept a DTC SPO Charge for the applicable Transaction Fee from the Trustee. Purchase Orders for which the Trustee has not received the Transaction Fee will be cancelled subject to handling pursuant to supplemental procedures to be issued, but in any event the Authorized Participant will remain obligated to the Trustee for the Transaction Fee.

C1.5 NOTES FOR TRUSTEE (CREATION T)

C1.5.1 Based on the Purchase Orders placed with it on CREATION T, the Trustee sends an email message to the Depository (by CREATION T+1) indicating the approximate total amount of Japanese Yen that the Depository will receive from the Authorized Participant on CREATION T+3.

C2 CREATION T+1

C2.1 The Purchase Orders and instructions given on CREATION T are all pending with the Trustee.

C2.2 The Depository receives the Trustee’s email message about the approximate total amount of Japanese Yen the Authorized Participant is required to transfer not later than [___ a.m/p.m.] [            ] time on CREATION T+3.

C3 CREATION T+2

C3.1 On CREATION T+2 the Trustee notifies the Authorized Participant of the final amount of Japanese Yen that must be deposited in the Deposit Account (the “Basket Japanese Yen Amount”) not later than [___ a.m/p.m.] [            ] time on CREATION T+3.

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C3.2 Based on the Purchase Orders placed with it on CREATION T, the Trustee sends an authenticated electronic message (SWIFT MT210) to the Depository indicating the total amount of Japanese Yen that the Depository will receive from the Authorized Participant on CREATION T+3.

C4 CREATION T+3

C4.1 By [___ a.m/p.m.] [            ] time (usually [___ a.m/p.m.] NYC time), the Depository has received each Authorized Participant’s wire transfer of the Basket Japanese Yen Amount in the Deposit Account.

C4.2 As of [___ a.m/p.m.] [            ] time, the Depository notifies the Trustee that the Basket Japanese Yen Amount has been transferred into the Deposit Account by an authenticated electronic message (SWIFT MT910).

C4.3 Prior to the delivery of the Baskets on CREATION T+3, the Trustee must have received the Transaction Fee from the Authorized Participant (SPO/DTC Charge).

C4.4 At [___ a.m/p.m.] NYC time, following receipt of the notice from the Depository confirming the transfer of the Basket Japanese Yen Amount to the Deposit Account, the Trustee authorizes the creation and issuance of the Baskets ordered by each Authorized Participant on CREATION T for which the Trustee has received confirmation from the Depository of receipt of the Basket Japanese Yen Amount.

C4.5 By [___ a.m/p.m.] NYC time, following receipt of the notice from the Depository confirming the transfer of the Basket Japanese Yen Amount to the Deposit Account, the Trustee notifies its transfer agent service desk that it has authorized the creation and issuance of Baskets in the number specified, and to increase the number of Shares outstanding accordingly. By [___ a.m/p.m.] NYC time, following receipt of the notice from the Trustee that it has authorized the creation and issuance of Shares in the number specified, the Trustee’s transfer agent service desk increases the number of Shares outstanding, and notifies the Trustee and the Trustee’s DTC operations desk that an increased number of Shares is now outstanding and available for release in accordance with the Trustee’s instructions.

C4.6 By [___ a.m/p.m.] NYC time, following receipt of notice from the Trustee’s transfer agent service desk that the number of Shares now outstanding has been increased, the Trustee notifies its DTC operations desk to release the increased number of Shares through DTC to the DTC participant accounts of the Authorized Participants scheduled to receive Baskets on CREATION T+3 for whom the Trustee has received confirmation from the Depository that the Basket Japanese Yen Amount has been received into the Deposit Account.

C4.7 Following the close of business (usually [___ a.m/p.m.] [            ] time) on CREATION T+3, the Depository makes appropriate entries in its books and records to reflect the creation of Baskets.

C4.8 Following the close of business (usually [___ a.m/p.m.] [            ] time) on CREATION T+3, the Depository Japanese Yen system updates account records, recording the movements of Japanese Yen in the Deposit Account and providing updated balances in the affected accounts as of the close of business (usually [___ a.m/p.m.] [            ] time) on CREATION T+3.

C4.9 Following the close of business (usually [___ a.m/p.m.] [            ] time) on CREATION T+3, the Depository Japanese Yen system automatically generates authenticated electronic messages (SWIFT MT940 or SWIFT MT950) constituting a statement of the activity affecting the Deposit Account (received only by the Trustee).

C4.10 If the Authorized Participant fails to deliver Japanese Yen by [___ a.m/p.m.] [            ] time on CREATION T+3, (a) the Trustee will apply a late fee equal to four (4) times the creation charge; and (b) the Depository may, in its reasonable discretion, apply a late fee calculated in accordance with standard industry practices.

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In the event any such late fees are assessed, the Trustee will coordinate with the Authorized Participant to arrange payment of such fees.

REDEMPTION PROCESS

OVERVIEW

The following describes the process by which Baskets are redeemed. In summary, an order to redeem one or more Baskets of Shares is placed by an Authorized Participant with the Trustee by [___ a.m/p.m.] NYC time on the NY Business Day that is the Order Date under the Trust Agreement (“REDEMPTION T”), Baskets to be redeemed are delivered to the Trustee by [___ a.m/p.m.] [            ] time (usually [___ a.m/p.m.] NYC time) on the second NY Business Day following REDEMPTION T, unless that day is not a Local Business Day, in which case Baskets shall be delivered the next following day that is both a New York Business Day and a Local Business Day (“REDEMPTION T+2”) and the Authorized Participant receives the corresponding Japanese Yen on the third NY Business Day following REDEMPTION T (“REDEMPTION T+3”). In order for the redemption of a Basket to occur, the Authorized Participant must pay a transaction fee and the Trustee will instruct the Depository to transfer to the Authorized Participant Japanese Yen corresponding to the Baskets delivered for redemption.

R1 REDEMPTION T (REDEMPTION ORDER TRADE DATE)

R1.1 By the Order Cut-Off Time, the Authorized Participant submits to the Trustee the Authorized Participant’s order to redeem one or more Baskets of Shares (a “Redemption Order”) in accordance with the following process.

R1.1.1 By the Order Cut-Off Time, an Authorized Person of the Authorized Participant calls the Trustee at 718-315-4970 or 4967, notifying the Trustee that the Authorized Participant wishes to place a Redemption Order for the Trustee to redeem an identified number of Baskets of Shares and requesting that the Trustee provide an order number. The Authorized Person provides a PIN as identification to the Trustee.

R1.1.2 Incoming telephone calls are queued and will be handled in the sequence received. The Trustee will process the Redemption Order(s) if the phone call initiated by the Authorized Person is placed before the Order Cut-Off Time, even though the remainder of the order process is not completed until after the Order Cut-Off Time. Accordingly, do not hang up and redial.

R1.1.3 Redemption Orders initiated after the Order Cut-Off Time are rejected.

R1.1.4 During the phone call from the Authorized Person of the Authorized Participant to initiate a Redemption Order, the Trustee will give an order number for the Authorized Participant’s Redemption Order.

R1.1.5 Within 15 minutes after the phone call initiating the Redemption Order, the Authorized Participant will fax the Redemption Order to the Trustee using the Redemption Order Form included as part of the Participant Agreement.

R1.1.6 The Redemption Order Form provides, among other things, for the number of Baskets that the Authorized Participant is redeeming and the condition that the Redemption Order is subject to Trustee’s receipt of the Transaction Fee by SPO/DTC Charge on REDEMPTION T+2 prior to the delivery of the Japanese Yen to the Authorized Participant.

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R1.1.7 If the Trustee has not received the Redemption Order Form from the Authorized Participant within 15 minutes after the Authorized Person placed the phone call to the Trustee, the Trustee places a phone call to the Authorized Participant to inquire about the status of the order. If the Authorized Participant does not fax the Redemption Order Form to the Trustee within 15 minutes after the Trustee’s phone call, the Authorized Participant’s order is cancelled, but the Authorized Participant will remain liable to the Trustee for the Transaction Fee.

R1.2 If the Trustee has received the Authorized Participant’s Redemption Order Form on time in accordance with the preceding timing rules, then by [___ a.m/p.m.] NYC time on REDEMPTION T, the Trustee will return to the Authorized Participant a copy of the Redemption Order Form submitted, marking it “Affirmed subject to receipt of Transaction Fee on REDEMPTION T+2 prior to delivery of the Japanese Yen” and indicating, on a preliminary basis subject to confirmation, the number of Japanese Yen the Participant will receive upon redemption of the indicated Basket(s) of Shares.

R1.3 NOTES FOR TRUSTEE AND DEPOSITORY (REDEMPTION T)

R1.3.1 On REDEMPTION T, the Trustee will prepare an authenticated electronic message (SWIFT MT202 or MT103plus) containing instructions specifying REDEMPTION T+3 as the date on which the instructions will be executed.

R1.3.2 The Trustee will deliver the authenticated electronic message (SWIFT MT202 or MT103plus) to the Depository on REDEMPTION T+2 only after confirming the Trustee’s receipt of Shares from the Authorized Participant through DTC.

R2 REDEMPTION T+1

R2.1 Redemption Orders and related instructions are in process.

R2.2 The Depository receives the authenticated electronic message (SWIFT) or e-mail from the Trustee notifying the Depository of the approximate amount of Japanese Yen needed to be remitted on REDEMPTION T+3 to each Authorized Participant that has placed a Redemption Order

R3 REDEMPTION T+2

R3.1 On REDEMPTION T+2 the Trustee notifies the Authorized Participant of the final amount of Japanese Yen that will be delivered to the Authorized Participant on REDEMPTION T+3 (the “Basket Japanese Yen Amount”).

R3.2 Prior to the delivery of instructions from the Trustee to the Depository directing the Depository to transfer the Basket Japanese Yen Amount on REDEMPTION T+3, the Trustee must have received the Transaction Fee from the Authorized Participant (SPO/DTC Charge).

R3.3 By [___ a.m/p.m.] [            ] time (usually [___ a.m/p.m.] NYC time), the Authorized Participant delivers free to the Trustee’s participant account at DTC (#2209) the Shares to be redeemed. The Authorized Participant telephones the Trustee’s DTC operations desk ((718) 315-4970 or 4967) to expect the Authorized Participant’s Shares through DTC.

R3.3.1 By [___ a.m/p.m.] [            ] time (usually [___ a.m/p.m.] NYC time), the Trustee’s DTC operations desk notifies the Trustee whether the Shares being redeemed by the Authorized Participant have been received into the Trustee’s participant account at DTC.

R3.3.2 By [___ a.m/p.m.] [            ] time (usually [___ a.m/p.m.] NYC time), if the Shares being redeemed by the Authorized Participant have been received into the Trustee’s participant account at DTC, the Trustee’s DTC operations desk accepts the Shares to be redeemed, notifies the Trustee that the Trustee has received the Authorized Participant’s Shares and identifies the Authorized Participant from whom the Shares have been received.

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R3.3.3 By [___ a.m/p.m.] [            ] time (usually [___ a.m/p.m.] NYC time), if the Shares of a redeeming Authorized Participant have not been received into the Trustee’s participant account at DTC, the Trustee’s operations desk notifies the Trustee that the Trustee has not received the Shares from the Authorized Participant, and identifies the Authorized Participant from whom Shares have not been received.

R3.4 By [___ a.m/p.m.] [            ] time (usually [___ a.m/p.m.] NYC time), the Trustee sends an authenticated electronic message (SWIFT MT202 or MT103plus) to the Depository directing the Depository to transfer the Basket Japanese Yen Amount to the accounts of those Authorized Participants from whom the Trustee has received Shares.

R4 REDEMPTION T+3

R4.1 On REDEMPTION T+3, the Depository executes the instructions from the Trustee to wire the Basket Japanese Yen Amount from the Trust Account and to transfer the Basket Japanese Yen Amount to the Authorized Participant’s designated account. The Japanese Yen will be sent to the designated accounts by wire (RTGSplus, EBA EURO1 or TARGET).

R4.1.1 By DTC free delivery cut-off time (usually [___ a.m/p.m.] NYC time), the Trustee’s DTC operations desk instructs the Trustee’s transfer agent services desk to eliminate Shares received for redemption.

R4.1.2 By DTC free delivery cut-off time (usually [___ a.m/p.m.] NYC time), the Trustee’s transfer agent services desk cancels the Authorized Participant’s Shares received for redemption and reduces the number of Trust Shares outstanding.

R4.2 Following the close of business (usually [___ a.m/p.m.] [            ] time) on REDEMPTION T+3, the Depository makes the appropriate entries in its books and records to reflect the redemptions.

R4.3 Following the close of business (usually [___ a.m/p.m.] [            ] time) on REDEMPTION T+3, the Depository Japanese Yen system updates its account records, recording the movements of Japanese Yen in the Deposit Account and providing updated balances in the affected accounts as of the close of business (usually [___ a.m/p.m.] [            ] time) on REDEMPTION T+3.

R4.4 Following the close of business (usually [___ a.m/p.m.] [            ] time) on REDEMPTION T+3, the Depository Japanese Yen system automatically generates an authenticated electronic message (SWIFT MT140 or Swift MT950) constituting a statement of the activity affecting the Deposit Account (received only by the Trustee).

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EX-10.1

Exhibit 10.1

SUBLICENSE AGREEMENT

This Sublicense Agreement (this “Agreement”) is entered into as of June 9, 2006 (the “Effective Date”), by and between PADCO Advisors II, Inc., a Maryland corporation (“Licensor”), and Rydex Specialized Products LLC, a Delaware limited liability company wholly-owned by Licensor (“Licensee”).

WHEREAS, Licensor and The Bank of New York (“BONY”) entered into a License Agreement, dated as of December 5, 2005 (the “BONY License Agreement”), whereby BONY granted Licensor a non-exclusive, non-transferable (except as provided in Section 12.1 of the BONY License Agreement) license (the “BONY License”) under the BONY Patent Rights (as defined herein) solely for the purposes of establishing, operating and marketing Licensed Products (as defined herein); the BONY License permits Licensor to grant sublicenses to its partners, co-sponsors, joint venturers, trustees, custodians and agents, in connection with their establishment, operation and marketing of Licensed Products;

WHEREAS, Licensor and Licensee entered into a Sublicense Agreement, dated as of December 5, 2005 (the “Former Sublicense”), whereby Licensor granted a sublicense to Licensee a non-exclusive, personal and non-transferable license to BONY Patent Rights in connection with the Euro Currency Trust; and Licensor and Licensee intend for this Agreement to supersede the Former Sublicense;

WHEREAS, the Euro Currency Trust was established pursuant to the Depositary Trust Agreement entered into by and between Licensee and BONY, dated as of December 5, 2005, pursuant to which the Trust issues Euro CurrencyShares which represent units of fractional undivided beneficial interest in and ownership of the Euro Currency Trust;

WHEREAS, each of the following CurrencyShares trusts (with the Euro Currency Trust, the “Existing Trusts”) was established pursuant to a Depositary Trust Agreement entered into by and between Licensee and BONY, each dated as of June 8, 2006, pursuant to which each trust will issue shares which represent units of fractional undivided beneficial interest in and ownership of the respective trust:

CurrencyShares Australian Dollar Trust

CurrencyShares British Pound Sterling Trust

CurrencyShares Canadian Dollar Trust

CurrencyShares Mexican Peso Trust

CurrencyShares Swedish Krona Trust

CurrencyShares Swiss Franc Trust

WHEREAS, additional CurrencyShares trusts (the “Future Trusts”) may be established from time to time, each pursuant to a trust agreement entered into by and between Licensee and BONY or a successor trustee. Each additional Future Trust may issue shares which will represent units of fractional undivided beneficial interest in and ownership of such Future Trust.

WHEREAS, Licensee is acting, or shall act, as the sponsor of the Existing Trusts and the Future Trusts (collectively, the “Trusts”; the associated agreements, the “Trust Agreements”; and the associated shares, the “Shares”) and is responsible for establishing the Trusts, registering the Shares and overseeing the performance of the trustee of the Trusts;

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WHEREAS, pursuant to the terms and conditions of the BONY License Agreement, Licensor desires to grant a sublicense to Licensee under the BONY Patent Rights, with the right to grant sublicenses, solely for Licensee’s use as the sponsor of the Trusts;

WHEREAS, Licensor uses in commerce and owns in the United States all domain names, trade names and trademark rights and associated goodwill in the designations specified on Schedule 1 attached hereto (the “Licensor Marks”); and

WHEREAS, Licensor desires to grant a license to Licensee to the Licensor Marks, with the right to grant sublicenses, solely for Licensee’s use as the sponsor of the Trusts.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Licensor and Licensee agree as follows:

1. DEFINITIONS.

For the purposes of this Agreement, the following terms have the following meanings:

(a.) “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person.

(b.) “BONY Patent Rights” means any patents and patent applications (and all related know-how and trade secrets) of BONY, anywhere in the world, that cover an investment product that is based solely on the securitization of a single non-U.S. currency and that exist as of the effective date of the BONY License Agreement or are filed or issued thereafter, including but not limited to U.S. Patent Application No. 10/680,589 filed on October 6, 2003 entitled “Systems and Methods for Securitizing a Commodity.”

(c.) “Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(d.) “Licensed Products” means any investment product that is based solely on the securitization of a single non-U.S. currency that is sold, sponsored or issued by Licensee or any Affiliate of Licensee. For the purposes of clarity, the Licensed Products do not include any products involving the securitization of any commodity other than non-U.S. currency.

(e.) “Person” shall be construed broadly and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or another entity, including a governmental entity or any department, agency or political subdivision thereof.

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2. LICENSE.

(a.) BONY Patent Rights Sublicense. Pursuant to Section 2 of the BONY License Agreement and subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a non-exclusive, personal and non-transferable (except as provided in Section 8(a) of this Agreement) license for the term of this Agreement to use the BONY Patent Rights solely in connection with Licensee’s performance of its services as sponsor of the Trusts pursuant to the Trust Agreements (the “BONY Sublicense”).

(b.) Licensor Marks License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a non-exclusive, personal and non-transferable (except as provided in Section 8(a) of this Agreement) license for the term of this Agreement to use the Licensor Marks solely in connection with Licensee’s performance of its services as sponsor of the Trusts pursuant to the Trust Agreements (the “Licensor Marks License”).

(c.) Licensee’s Limited Right to Sublicense. Each of the BONY Sublicense and the Licensor Marks License granted herein shall include the limited right of Licensee to grant sublicenses to its Affiliates, partners, co-sponsors, joint venturers, trustees, distributors, custodians and agents (each a “Sublicensee”), subject to the restrictions of this Agreement, and solely in connection with such Sublicensee’s performance of services for Licensee related to the activities of Licensee permitted hereunder. In addition, Licensee shall include provisions in all such sublicenses that: (i) are identical in substance to Sections 3, 4 and 5 herein (with the references in such sublicenses to “Licensor” in Section 4(c) to continue to signify the Licensor defined herein); (ii) require Licensee to terminate such sublicenses, without penalty, if this Agreement is terminated for any reason; (iii) obligate Licensee to give the Sublicensee notice if this Agreement is terminated for any reason; and (iv) entitle Licensor herein to give such notice in the event that the Licensee fails to do so.

(d.) All rights not specifically and expressly granted to Licensee in this Section 2 are hereby reserved to Licensor.

3. ENFORCEMENT.

Licensee shall promptly (a.) notify Licensor of any potential or actual infringement by a third party of the BONY Patent Rights or the Licensor Marks of which Licensee becomes aware, and (b.) provide to Licensor all evidence of such infringement in Licensee’s possession, custody or control. With respect to Licensor Marks, Licensor shall (y.) have the sole right, but not the obligation, to initiate any legal action at its own expense against such infringement and to recover damages and enforce any injunction granted as a result of any judgment in Licensor’s favor and (z.) Licensor shall have sole control over any such action, including, without limitation, the sole right to settle and compromise such action. In the event of a dispute between Licensor and any third party regarding the infringement, validity or enforceability of the BONY Patent Rights or the Licensor Marks, Licensee agrees, at Licensor’s expense, to do all things reasonably requested by BONY or Licensor to assist them in connection with such dispute.

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4. TERM AND TERMINATION.

(a.) The term of this Agreement shall commence as of the Effective Date and shall remain in full force and effect until the termination of the last of the Trust Agreements to terminate, unless earlier terminated pursuant to the terms of this Agreement (the “Term”).

(b.) Either party may terminate this Agreement by written notice to the other party at any time if the other party materially breaches this Agreement and fails to cure such breach with thirty (30) days following written notice thereof from the non-breaching party. Upon any termination or expiration of this Agreement, all rights and obligations under this Agreement (including Licensee’s rights under the BONY Sublicense and the Licensor Marks License granted pursuant to Section 2 of this Agreement) will immediately terminate; provided, however, that the provisions of Sections 5, 6, 7, and 8, and any other provision that survives by its express terms, shall survive any termination or expiration of this Agreement.

(c.) On expiration or termination of this Agreement, Licensee shall immediately cease and desist from all use of the BONY Patent Rights and the Licensor Marks, and any similar marks, and inventions or works based on or derivative thereof; and shall immediately deliver all products bearing or made in connection with the BONY Patent Rights or the Licensor Marks, including without limitation all inventions or works based on or derivative thereof, to Licensor at the address set forth in the notice section below, or destroy them, at the option of Licensor.

5. ACKNOWLEDGMENT OF RIGHTS.

(a.) Licensee will not directly or indirectly: (i) challenge or contest the validity or enforceability of the BONY Patent Rights or the Licensor Marks; (ii) dispute the validity, enforceability, or BONY’s ownership of any patent within the BONY Patent Rights, any inventions or works based thereon or derivative thereof, or any of the claims therein (“Patent Rights”), or initiate or participate in any proceeding of any kind opposing the grant of any patent, or challenging any patent application in connection with the Patent Rights; (iii) dispute the validity, enforceability, or Licensor’s exclusive ownership of, any trademark, trade name or domain name application or registration owned by Licensor with respect to the Licensor Marks or initiate or participate in any proceeding of any kind opposing the grant to Licensor of any trademark, trade name, or domain name registration in the Licensor Marks or similar marks; (iv) fail to meet Licensor’s quality control with respect to the Licensor Marks or make any other use thereof other than as expressly permitted herein; (v) apply to register or otherwise obtain registration of the BONY Patent Rights or any inventions or works based thereon or derivative thereof, the Licensor Marks, or any marks similar thereto, in the patent and trademark or copyright office of any country or state, or with any business or domain name registrar; or (vi) assist any other Person to do any of the foregoing (except if required by court order or subpoena); provided, however, the foregoing shall in no way limit Licensee’s ability to defend against or to mitigate any claim brought by Licensor or BONY against Licensee.

(b.) Any violation of this Section 5 will constitute a material breach of this Agreement.

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6. REPRESENTATIONS AND WARRANTIES.

(a.) Each party hereby represents and warrants that (i) it has the power and authority to enter into this Agreement and perform its obligations hereunder; (ii) the execution and delivery of this Agreement have been duly authorized and all necessary actions have been taken to make this Agreement a legal, valid and binding obligation of such party enforceable in accordance with its terms; and (iii) the execution and delivery of this Agreement and the performance by such party of its obligations hereunder will not contravene or result in any breach of the certificate of incorporation, bylaws, certificate of formation, limited liability company agreement or any other organizational document of such party or of any agreement, contract, indenture, license, instrument or understanding or, to the best of its knowledge, result in any violation of law, rule, regulation, statute, order or decree to which such party is bound or by which they or any of their property is subject.

(b.) Licensor represents and warrants that it owns and/or has the right to sublicense to Licensee the BONY Patent Rights and to license to Licensee the Licensor Marks in the United States and that to its actual knowledge, the BONY Patent Rights and the Licensor Marks and Licensee’s use of the foregoing in accordance with this Agreement shall not infringe any copyright, trademark, trade secret or other intellectual property right of any third party.

(c.) EXCEPT AS EXPRESSLY SET FORTH IN THE FOREGOING, LICENSOR DOES NOT MAKE AND HEREBY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

7. LIMITATION OF LIABILITY.

NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR OTHER INDIRECT DAMAGES, HOWSOEVER CAUSED, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

8. MISCELLANEOUS PROVISIONS.

(a.) Assignment. Licensee may not assign or otherwise transfer (whether by operation of law or otherwise) any right or obligation under this Agreement without the prior written consent of Licensor; provided, however, that Licensee may grant sublicenses as provided herein. Such consent shall be deemed given with respect to an assignment or transfer (whether by operation of law or otherwise) of the entire Agreement, including all rights and obligations hereunder, to a successor in interest or assignee of substantially all of the assets of Licensee, provided that Licensee has given prompt written notice thereof to Licensor. This Agreement is binding on and inures to the benefit of the parties and their permitted successors and assigns. Any attempted assignment or other transfer of rights under this Agreement in violation of this Section 8(a) will be void.

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(b.) Governing Law. This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of Maryland without reference to or inclusion of the principles of choice of law or conflicts of law of that jurisdiction (except that questions affecting the construction and effect of any patent will be determined by the law of the country in which the patent was granted). It is the intent of the parties that the substantive law of the State of Maryland govern this Agreement and not the law of any other jurisdiction incorporated through choice of law or conflicts of law principles.

(c.) Exclusive Jurisdiction and Venue. Each party agrees that any legal action, proceeding, controversy or claim between the parties arising out of or relating to this Agreement may be brought and prosecuted only in the United States District Court for the District of Maryland or, if that Court lacks or declines to exercise subject matter jurisdiction, in the courts of the State of Maryland, and by execution of this Agreement each party hereto submits to the exclusive jurisdiction of such court and waives any objection it might have based upon improper venue or inconvenient forum. Each party hereto waives any right it may have to a jury trial in connection with any legal action, proceeding, controversy or claim between the parties arising out of or relating to the Agreement.

(d.) Entire Agreement. This Agreement sets forth the entire agreement of the parties as to its subject matter and supercedes all prior agreements, negotiations, representations, and promises between them with respect to its subject matter.

(e.) Unenforceable Provisions. If any provision of this Agreement is held unenforceable by a court of competent jurisdiction, the other provisions will remain in full force and effect. If legally permitted, the unenforceable provision will be replaced with an enforceable provision that as nearly as possible gives effect to the parties’ intent.

(f.) Notices. A notice under this Agreement is not sufficient unless it is: (i) in writing; (ii) addressed using the contact information listed below for the party to which the notice is being given (or using updated contact information which that party has specified by written notice in accordance with this Section 8(f)); and (iii) sent by hand delivery, facsimile transmission, registered or certified mail (return receipt requested), or reputable express delivery service with tracking capabilities (such as Federal Express).

CONTACT INFORMATION FOR LICENSOR:

PADCO Advisors II, Inc.

9601 Blackwell Road, Suite 500

Rockville, Maryland 20850

Attention: Carl G. Verboncoeur

Telephone: (301) 296-5100

Facsimile: 301-296-5112

CONTACT INFORMATION FOR LICENSEE:

Rydex Specialized Products LLC

9601 Blackwell Road, Suite 500

Rockville, Maryland 20850

Attention: Timothy Meyer

Telephone: (301) 296-5129

Facsimile: (301) 296-5112

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(g.) Amendments. This Agreement may not be amended unless the amendment is in writing and signed by authorized representatives of both parties.

(h.) Waivers. A waiver of rights under this Agreement will not be effective unless it is in writing and signed by an authorized representative of the party that is waiving the rights.

(i.) Counterparts. The parties may execute this Agreement by signing separate copies of the signature page. A facsimile copy of the signature page will have the same effect as the original.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

PADCO ADVISORS II, INC.

By:

Name:

Title:

RYDEX SPECIALIZED PRODUCTS LLC

By:

Name:

Title:

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SCHEDULE 1

LICENSOR MARKS

Rydex

Rydex Investments

FXE

FXA

FXB

FXC

FXM

FXS

FXF

CurrencyShares

currencyshares.com

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EX-10.2

EXHIBIT 10.2

GLOBAL ACCOUNT TERMS

DEPOSIT ACCOUNT AGREEMENT

The Bank of New York, in its capacity as trustee of the CurrencyShares Japanese Yen Trust, a trust formed under New York law (the “Customer” or “Trust”) and the London Branch of JPMorgan Chase Bank, N.A. (the “Bank”) undertake to comply with and be bound by the following Global Account Terms of this Deposit Account Agreement (the “Agreement”).

ESTABLISHING ACCOUNTS

1.1 The Customer’s Japanese Yen-denominated, (i) interest-bearing account (the “Interest Account”) and (ii) non interest–bearing account ( the “Non-Interest Account”) (each individually the “Account” and collectively the “Accounts”) maintained with the Bank shall be subject to these Global Account Terms (the “Account Terms”) and the Account Application and the Signature List executed by the Customer regarding the Accounts attached hereto (together, the “Account Applications”); and, by continuing to use the Accounts, the Customer acknowledges its acceptance of these Account Terms and the relevant Account Applications.

1.2 Unless otherwise specified, the Customer will establish the Accounts as principal. The Customer shall not transfer any of its rights and interests in the Accounts nor create any form of security interest over such rights and interests without the prior written consent of the Bank.

1.3 The Customer represents and warrants that it has power and capacity to open and operate the Accounts, that the Account Terms and the relevant Account Applications constitute valid and binding obligations of the Customer and that the Customer has taken all necessary actions to duly authorize the execution and delivery of the same.

SIGNATORIES

2.1 “Signatory” means a person named in the relevant Account Application (or other analogous document under which the Customer authorises persons to communicate with the Bank in relation to the Accounts) who is authorised to act on behalf of the Customer at the time of the relevant Instruction (as defined in Section 4.1) and in respect of the matters set out in clause 3 below.

2.2 The Bank may treat any Signatory as duly authorised to issue Instructions until the Bank receives written notice from the Customer, after which the Bank shall act promptly, that the Signatory no longer has the authority to issue Instructions.

2.3 The Customer will provide specimen signatures (including specimens of facsimile signatures and/or personal seals) to the Bank (in the Account Application or otherwise) in the number and form required and will verify the identity of each Signatory in a manner required by the Bank.

AUTHORITY OF SIGNATORIES

3.1 Each Signatory, subject to any written limitation received by the Bank from the Customer, is authorised on behalf of the Customer to:

(a) open, operate and close the Accounts;

(b) appoint and remove Signatories;

(c) execute the Account Application(s) and any form of agreement relating to communications, whether by telephone, telex, electronic or other means;

(d) execute any agreements relating to overdrafts, borrowings or cash management;

(e) draw, accept, endorse or discount cheques, drafts, bills of exchange, notes and other instruments;

(f) overdraw the Accounts as may be permitted by the Bank;

(g) make arrangements with the Bank concerning periodic payments into or out of the Accounts;

(h) advise the Bank of credits destined for the Customer’s Account;

(i) place money on interest-bearing or term deposit with the Bank and withdraw that money and accrued interest either on or before any applicable maturity date;

(j) authorize and request the Bank to effect foreign exchange transactions and purchase and/or sell treasury products for the account of the Customer;

(k) deposit any property of the Customer with the Bank for safe keeping, have access to and reclaim any property so deposited or give the Bank Instructions in relation to it;

(l) execute guarantees, indemnities or other undertakings to the Bank in relation to:

(i) missing documents;

(ii) guarantees, letters of credit or other undertakings given or to be given by the Bank to or at the request of the Customer; or

(iii) anything else done or to be done by the Bank at the request of the Customer;

(m) give the Bank any form of security over, or make any other arrangements with the Bank concerning, any property of the Customer including without limitation bills of exchange, bills of lading, warehouse certificates, insurance policies and share and debenture certificates;

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(n) countermand, revoke or amend Instructions; and

(o) give the Bank Instructions relating to any of the above.

INSTRUCTIONS

4.1 “Instruction” means a communication, including without limitation a cheque or demand for payment, which (i) contains the information required by the Bank to enable the Bank to give effect to the communication; (ii) is received by the Bank in writing, by facsimile, tested or untested telex, SWIFT, telephone, or via the Bank’s electronic instruction system or such other means as are for the time being agreed by the Customer and the Bank; and (iii) the Bank believes in good faith to have been given by the Customer.

4.2 The Customer is responsible for keeping and completing cheques and other forms and documents and for issuing Instructions in a manner so as to prevent unauthorised completion, alterations or additions. The Customer shall not issue cheques which are post- dated and shall immediately notify the Bank if it becomes aware that any of its cheques (whether completed or blank) are lost or stolen.

4.3 If the Bank and the Customer at any time agree on a security procedure to be used in relation to any category of communications (including encryption), the Customer shall safeguard any test keys, passwords, identification codes or other security or authentication devices, make them available only to properly authorised persons and be fully responsible for any use of such security procedure (whether authorised or unauthorised)

4.4 Nothing in this Clause 4 obligates the Bank to confirm Instructions which appear to the Bank acting in good faith to have been given by the Customer.

AUTHORITY AND OBLIGATIONS OF THE BANK

5.1. The Bank is authorised and agrees to accept, honour and execute without inquiry each Instruction which the Bank believes in good faith to have been given by a Signatory and any other Instruction communicated by other means which the Bank receives in strict accordance with any agreed security procedure. Provided the Bank believes in good faith that an Instruction has been given by a Signatory, where such an Instruction has been effected by means of a facsimile signature, personal seal or chop, the Bank is authorised to act on such Instruction, regardless of by whom the facsimile signature, personal seal or chop was actually affixed. The Bank need not inquire into the circumstances of any transaction.

5.2 The Bank may at its option use any means to confirm or clarify Instructions, even if any agreed security procedure appears to have been followed. If the Bank is not satisfied with any confirmation or clarification, it may decline to honour the Instruction.

5.3 The Bank has established cut-off times for some categories of communications, details of which are attached hereto as Addendum A. If an Instruction is received by the Bank after its cut-off times, the Bank may process the Instruction on the next day on which it is open for such business. The Bank may process any Instruction through any of the payments systems identified in Addendum A.

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5.4 Execution of Instructions will be subject to applicable law and the rules of the payment system used, including those laws or rules concerning a misdescribed or missing beneficiary, beneficiary’s bank or intermediary bank. The Bank may rely on the identifying number of any account, intermediary or beneficiary’s bank which appears in an Instruction as the proper identification of the beneficiary, intermediary or beneficiary’s bank notwithstanding that the Instruction identifies an entity different from the entity identified by name in the Instruction. The Bank may complete or correct incomplete or inaccurate intermediary or beneficiary bank details.

5.5 Due to the operations of the Trust, mid-month redemptions of shares of the Trust could result in an Instruction that would require a withdrawal from the Non-Interest Account in excess of the balance in such account. The Bank shall honour such an Instruction without assessing an overdraft fee. The Bank may charge customary interest, fees and other expenses for all other overdrafts of the Non-Interest Account or the Interest Account.

5.6 Where execution of an Instruction requires the Bank to purchase or sell a currency other than the currency of the Account on which the Instruction is given, the Bank is authorised to purchase or sell the currency at a commercially reasonable rate at the relevant time for the purchase or sale of such currency taking into account the size and tenor of the transaction.

5.7 If the Customer chooses to confirm any Instruction, any confirmation must be clearly marked as such and, if there is any discrepancy between an Instruction and any confirmation, the terms of the Instruction shall prevail.

DEPOSITS, AVAILABILITY OF FUNDS

6.1 The Customer undertakes that it will have good title to all items presented to the Bank for deposit or for any other purpose. Money deposited or paid into an Account will not be regarded as available until collected and irrevocably received in cleared funds. The Customer requests that the Bank accept without inquiry all cheques and other instruments presented for deposit into the Account without checking whether they are valid, properly endorsed or owned by the Customer.

6.2 As collecting bank, the Bank as agent for the Customer will deal with and present the cheques and instruments in accordance with the custom and practice of the country in which the cheques are collected.

6.3 If the Bank credits the Account in contemplation of receiving funds for the Customer’s credit and those funds are not actually received by the Bank, or on the faith of a transaction which is subsequently set aside or revoked, or if the Bank does not receive funds for the Customer’s credit for value on the date advised by or on behalf of the Customer, the Bank shall be entitled to debit the Account of the Customer with the amount previously credited and/or with any other charges incurred. If the Account becomes overdrawn or further overdrawn as a result of such debit, the Customer will pay on demand the overdrawn amount and interest on the overdrawn amount.

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6.4 Bank reserves the right not to accept, and to return without interest to the remitter of funds, the amounts received for deposit to the Interest Account on any Bank business day, if the aggregate deposit liability of the Bank to the Trust following the deposit of such amounts would exceed the Japanese Yen equivalent of $2.75 billion U.S. dollars calculated at the Federal Reserve Bank of New York Noon Buying Rate (the “Noon Buying Rate”) for the Japanese Yen or another recognized market rate for the Japanese Yen if the Noon Buying Rate is not available on the banking day such deposits are received by the Bank.

6.5 The Bank shall notify the Customer and the Customer’s sponsor if there are extraordinary circumstances causing the Bank to reasonably expect that it will be unable to accept Instructions for the withdrawal of money held in the Accounts. Upon such notification, the Customer may determine, in its sole discretion, to suspend generally or refuse orders to redeem shares of the Trust. In such case, the Customer and the Bank shall consult with each other and use good faith efforts to resume withdrawals as soon as possible.

6.6 Each day that orders are placed with and accepted by the Trust for the purchase or redemption of shares in the Trust, the Trust shall notify the Bank of the anticipated amounts of Japanese Yen that will be deposited to, or withdrawn from, the Interest Account on the settlement date for those orders.

INTEREST

7.1 Interest will accrue daily, in Japanese Yen, on all Japanese Yen balances in the Interest Account only and will be credited monthly, in Japanese Yen, to the Non-Interest Account. No interest will be earning on balances in the Non-Interest Account. The Bank agrees that it will endeavour at all times to pay a competitive interest rate on all Japanese Yen balances in the Interest Account. As of the date of this Agreement, the Bank has agreed to pay interest at a rate equal to the Bank of Japan average Overnight Uncollateralized Call Rate (as published on the Reuters Page TONAT or on the Bank of Japan website at http://www3.boj.or.jp/market/en/menu_m.htm) less 27 basis points on all balances in the Interest Account. The Bank may change the rate based upon changes in the Bank of Japan Overnight Uncollateralized Rate, other market conditions or the Bank’s liquidity needs. The Bank will notify the Customer of the interest rate applied each Bank business day after the close of the Bank business day. The Bank will endeavour to provide to the Customer and Customer’s sponsor advance notice whenever the Bank intends to change the interest rate on the Interest Account, except where there are unforeseen changes in conditions or significant changes in the Trust’s balances in the Interest Account. If the Bank at any time pays an unsatisfactory interest rate on the Interest Account, the Customer’s sole recourse will to be to withdraw the Japanese Yen balance from the Interest Account, terminate the Deposit Account Agreement and close the Accounts.

ACCOUNT INFORMATION

8.1 The Bank will issue, on a daily basis, balance and transactions reports for the Accounts for the previous banking day. Bank will also send a periodic statement of account for the Accounts as agreed with the Customer.

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8.2 The Customer will ensure that the statements, confirmations and advices it receives from the Bank are examined by a responsible person on behalf of the Customer within a reasonable time of receipt and, thereupon, Customer shall promptly notify the Bank of any mistake or discrepancy of which the Customer becomes aware from such statements, confirmations and advices. The Bank shall not be responsible for the Customer’s reliance on balance, transaction or related information which is subsequently updated or corrected or for the accuracy or timeliness of information supplied by any third party to the Bank.

OTHER DOCUMENTATION

9.1. These Account Terms and the Account Applications replace any existing agreements relating to the subject matter hereof or thereof, with effect from the date the Bank receives the relevant Account Application or analogous document in form and substance satisfactory to the Bank.

9.2 These Account Terms are in addition to any future agreement between the Bank and the Customer (including without limitation any agreement relating to the provision of electronic banking services, specific payment or cheque services or custody services) and if there is an inconsistency between these Account Terms and any such other agreement, any such other agreement will prevail for the purposes of the particular account or service which is the subject of such other agreement. If there is an inconsistency between these Account Terms and any terms of the relevant Account Application(s), the terms of the Account Application(s) shall prevail for the purposes of the Account(s) which are subject to such Account Application(s).

REVERSALS

10.1 Unless otherwise expressly provided, all Instructions shall continue in full force and effect until cancelled or superseded. Instructions may be reversed, amended, cancelled or revoked by the Customer only with the consent of the Bank. That consent shall not be withheld unless the Bank reasonably determines that it would not be possible to give effect to any reversal, amendment or revocation, or the Bank has entered into other transactions or otherwise materially changed its position as a result of receiving such Instructions.

10.2 The Customer may stop payment of a cheque at any time provided the Bank branch on which the cheque is drawn receives an Instruction to that effect from the Customer prior to the Bank honouring or arranging to honour the cheque concerned.

10.3 If the Bank erroneously posts or fails to post an entry to the Account the Bank may reverse or make a correcting entry and the provisions of clause 6.3 shall apply to any resulting overdraft.

FEES AND CHARGES

11.1 The Bank may, at its option, invoice the Customer or debit the Account for services or for handling telecommunications or messages dispatched at the Customer’s request, and other out of pocket costs incurred by it for the Customer’s account in accordance with its fee arrangements in place from time to time. Attached hereto and marked “Fee Schedule” is a copy of the current fees. All payments to be made to the Bank shall be in full, without set-off or counterclaim and free of any deductions or withholdings on account of any tax or otherwise. The Bank will forward to the Customer a statement in respect of each Account detailing all interest (if applicable) and fees charged to that Account.

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11.2 The Customer agrees to pay or reimburse the Bank for any taxes, levies, imposts, deductions, charges, stamp, transaction and other duties and withholdings (together with any related interest, penalties, fines, and expenses in connection with them) in connection with the Accounts (including payments or receipts to the Accounts) except if imposed on the overall net income of the Bank.

REPAYMENT OF OVERDRAFTS

12.1 In the event that there is an overdraft of the Non-Interest Account (as provided for in Section 5.5 hereof), any monies paid into the Non-Interest Account will first be used to credit such overdraft.

INDEMNITY AND LIABILITY

13.1 The Customer shall fully indemnify the Bank and its employees, officers and directors and each of the affiliates and subsidiaries of JPMorgan Chase Bank, N.A. on demand, at all times against any losses, costs, claims, damages, liabilities and expenses (including without limitation legal fees) which it or they suffer or incur directly or indirectly as a result of (i) the Customer’s breach of these Account Terms, (ii) the Bank acting on what it believed in good faith to be the Customer’s communication or Instruction or because of anything done under or as contemplated by these Account Terms. This indemnity is in addition to and not in substitution for any other indemnity or right in favour of the Bank given by law or otherwise and shall not be affected or discharged by anything.

13.2 (i) Subject to clause 13.2 (ii) below, the Bank shall be liable only for direct loss or damage which the Customer suffers or incurs arising from the Bank’s gross negligence or willful misconduct and shall not be liable for any other loss or damage of any nature.

(ii) The Bank shall not in any event be liable for loss of business or profits or goodwill or any indirect or consequential or punitive or special loss or damage, in each case whether or not reasonably foreseeable, even if the Bank has been advised of the likelihood of such loss or damage and whether arising from negligence, breach of contract or otherwise.

(iii) The provisions of clause (i) and (ii) above shall not apply to the extent that the loss or damage is caused by fraud on the part of the Bank.

13.3 The Bank of New York enters into this Agreement only in its capacity as trustee and in no other capacity, and in no circumstances shall The Bank of New York have any liability under or in connection with this Agreement other than as trustee of the Trust. Any liability of the Trustee arising under or in connection with this Agreement is limited to, and can be enforced against the Trustee only to the extent to which such liability can be satisfied out of, the assets of the Trust which are available under the terms of the trust agreement governing the Trust to meet such liability at the time the amount in respect of such liability is claimed against the Trustee. This limitation on the Trustee’s liability applies despite any other provision of this Agreement and extends to all liabilities and obligations of the

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Trustee in any way connected with any representation, warranty, conduct, omission, agreement or transaction related to this Agreement, except that the Trustee will be held liable individually for its fraud or willful misconduct in connection with these Account Terms.

GOVERNING LAW AND JURISDICTION

14.1 These Account Terms, the relevant Account Application and the rights and obligations of the Customer and the Bank in respect of the Accounts shall be governed by, performed and construed in accordance with the laws of England.

14.2 If any of these Account Terms is unenforceable or illegal in any jurisdiction, that will not affect the rest of the Account Terms in that jurisdiction, or any of the Account Terms in any other jurisdiction.

14.3 In relation to the Accounts, the courts of England shall have non-exclusive jurisdiction to settle any disputes which arise out of or are connected with these Account Terms, the relevant Account Application and/or the relevant Account. This clause does not prevent the Bank or Customer from taking proceedings in the United States.

RECORDING

15.1 The Bank may record telephone conversations in connection with an Instruction. At the Customer’s request and cost the Bank will supply a copy or transcript of any such recording to the Customer. The recording or transcript may be used in resolving any dispute between the Bank and the Customer. Recordings and any transcript shall be the property of the Bank.

15.2 The Bank may microfilm or electronically record any document and subject to any law affecting the relevant Account may destroy the original of such documents. Subject to the provisions of applicable law the Bank and the Customer shall be entitled to rely on any such stored document in any legal proceeding or for any other purpose.

DISCLOSURE

16.1 The Customer authorises the Bank to retain an affiliated company and/or any other agents to perform data processing, collection and other services which the Bank considers necessary or desirable for the Bank. The Bank reserves the right to modify or terminate its arrangements with its agents at any time.

16.2 The Customer agrees that Instructions and information concerning the Accounts, the Customer and transactions to be disclosed in accordance with this clause 16 may be transmitted across national boundaries and through networks including those owned and operated by third parties.

16.3 The Customer authorises the Bank to disclose information concerning the Accounts, transaction or the Customer where, (i) in the Bank’s view, the disclosure is necessary or desirable for the purpose of allowing the Bank to perform its duties and exercise its powers and rights hereunder; (ii) the disclosure is to a proposed assignee of the rights of the Bank in

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respect of the Account; (iii) the disclosure is to a branch, affiliate, subsidiary, employee or agent of JPMorgan Chase & Co. or to its auditors or legal advisers; (iv) the disclosure is to the auditors of the Customer; or (v) as may be otherwise required by law, irrespective of whether the disclosure is made in the jurisdiction in which the Customer is resident, the Account is kept, the transaction conducted or elsewhere.

FORCE MAJEURE

17.1 The Bank shall have no liability for any damage, loss, expense or liability of any nature which the Customer may suffer or incur, to the extent caused by an act of God, fire, flood, civil or labour disturbance, war or terrorism, act of any governmental authority or other act or threat of any authority (de jure or de facto), legal constraint (including attachments or other legal process), fraud or forgery (other than on the part of the Bank or any of its directors, officers or employees), malfunction of equipment (including, without limitation, any computer or related software) except where such malfunction is primarily attributable to the Bank’s gross negligence in maintaining the equipment or software, failure of or the effect of rules or operations of any funds transfer system, inability to obtain or interruption of communications facilities, or any cause beyond the reasonable control of the Bank (including, without limitation, the non-availability of appropriate foreign exchange);

17.2 Any amount standing to the credit of the Account with the Bank is payable exclusively at the branch at which the Account is held: however, payment may be suspended from time to time in order to comply with any law, regulation, governmental decree or similar order for the time being affecting the Bank, its officers, employees, affiliates, agents or correspondents.

NOTICES

18.1 Any communication, other than an Instruction, shall be in writing unless otherwise agreed and may be sent by personal delivery, facsimile, telex, SWIFT or post, addressed, in the case of communications from the Customer to the Bank, to the branch of the Bank where the Account is maintained, and, in the case of communications from the Bank to the Customer, to the address notified by the Customer to the Bank from time to time. Any communication will only be effective when actually received.

CLOSURE/TERMINATION

19.1 The Bank has the right to close an Account at any time by not less than ninety days notice in writing addressed to the Customer at its most recent address as advised by the Customer to the Bank. Before or on the expiry of such notice the Bank, will transfer any balance in the Account in accordance with the Customer’s Instructions. On the expiry of such notice, the Bank’s obligations in respect of the Account shall cease. However, any such closure or termination shall not affect the Customer’s liabilities to the Bank arising prior to or after such termination or closure, all of which shall continue in full force and effect. In the absence of such Instructions the Bank may transfer the balance to an unclaimed moneys account.

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MISCELLANEOUS

20.1 The expressions “Bank” and “Customer” when used herein shall include any successor of the Bank or the Customer, as applicable, and “successor” means an assignee or successor of JPMorgan Chase Bank, N.A., or of the CurrencyShares Japanese Yen Trust, as applicable, or any person who, under the laws of its jurisdiction of incorporation or domicile, has assumed the rights and obligations of JPMorgan Chase Bank, N.A., or of the CurrencyShares Japanese Yen Trust, as applicable, hereunder or to which under such laws the same have been transferred.

20.2 If these terms are translated into, or appear in a language other than English, the English language version shall govern and control.

20.3 Headings are for convenience only and shall not affect the interpretation of this document.

20.4 The Customer acknowledges that deposits held in a branch of the Bank located outside of the U.S. are not insured by the Federal Deposit Insurance Corporation, are subject to cross-border risks and may enjoy a lesser preference, as compared to deposits held in the U.S., in the event the Bank should be liquidated, insolvent or placed into receivership or other proceeding for the benefit of creditors.

20.5 These Account Terms may be enforced only by the Bank or the Customer or such party’s successors and permitted assigns. Notwithstanding the foregoing, but subject to the prior written consent of the Bank, each employee, officer and director of the Bank and each of the affiliates and subsidiaries of JPMorgan Chase Bank, N.A. may enforce the terms of clause 13. The Bank and the Customer may at any time, by agreement, rescind these Account Terms or vary them without the consent of such employees, officers, directors or the affiliates and subsidiaries of JPMorgan Chase Bank, N.A.

20.6 (i) The Bank will collect information about the Customer and the Customer’s employees and agents which may constitute personal data for the purposes of the Data Protection Act 1998 (the “Act”) and other relevant data protection legislation (such as, without limitation, authorised signatory details). Such personal data may be collected by or on behalf of the Bank in a number of ways (the “Collection Methods”), including via Account Applications or other analogous documents, via applications or documentation relating to the provision to or use by the Customer of electronic banking services, or specific payment or cheque services, via the Customer’s use of such electronic banking services, or specific payment or cheque services, and via other correspondence or communications between the Customer and the Bank.

(ii) The Bank will use personal data collected by it or on its behalf via the Collection Methods for the following purposes (the “Purposes”); namely, for the purpose of providing the services to the Customer in accordance with the Global Account Terms and Account Applications, for otherwise administering the Account(s), for providing the Customer with services such as electronic banking services, or specific payment or cheque services, for the Bank’s internal administrative purposes, for contacting the Customer about products and services which the Bank or other members of the Bank’s group offer which the Bank believes may be of interest to the Customer, and as may be otherwise required by law or applicable regulatory or governmental authorities, and such purposes may include transfer of such personal data outside of the United Kingdom to the Bank’s subsidiaries or other connected companies or to other organisations as may be required by law or other applicable regulatory or governmental authorities.

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(iii) The Customer shall ensure that any disclosure of personal data made by it or by its employees or agents via the Collection Methods which relate to the Customer’s employees or agents is only made following notification by the Customer to data subjects of the Purposes for which their personal data may be processed by or on behalf of the Bank, and is otherwise fair and lawful.

[Signatures on following page]

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IN WITNESS WHEREOF, this Agreement has been duly executed as of                     , 200  .

CURRENCYSHARES JAPANESE YEN TRUST

By The Bank of New York, in its capacity as Trustee of the CurrencyShares Japanese Yen Trust and not in its individual capacity

By

Name:

Title:

JPMORGAN CHASE BANK, N.A., LONDON BRANCH

By:

Name:

Title:

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CORRESP

January 5, 2007 ATTORNEYS AT LAW   ONE DETROIT CENTER 500 WOODWARD AVENUE, SUITE 2700 DETROIT, MI 48226-3489 313.234.7100 TEL 313.234.2800 FAX www.foley.com   CLIENT/MATTER NUMBER 058081-0110