Fixed market rates
The fixed market rates system pursues fixing the forex rate or limiting the moving range to some extent. In other words, Peg system. Under the fixed market rates system, the movement of the forex rates are controlled to maintain within 0.75% or 1% of each parity. When the economic environment suddenly changes, it urges the shift of capital flows on cross border basis. Although the central bank tries to keep the relevant parity, the speculative investment breaks the parity.
In those cases, IMF allows the central bank to change the parity to a certain extent. Accordingly, the relevant central bank would get the value of currency hike or cut later.
In Japan, the forex rate of USD-JPY was fixed at 360 in 1949 and the Yen was registered as IMF parity as well as other forex currencies. The Nixon shock in August, 1971 enforced to stop to exchange US dollar with gold, and in December, the forex rate, USD-JPY fell to 308 which means 16.88% depreciation of US dollar.
Floating market rates
Different from the fixed market rates system, the floating market rates system pursues the real supply and demand in the market. The change of parity in the fixed market rates system brings about necessity of further change by speculative movement, and before long it would be difficult to keep the forex rate and would shift quite naturally to the floating market rates system.
In Japan, the floating market rates system was executed in 1973, when the first oil shock attacked developed countries. It followed the highly volatile movement in the forex market, and then, it was accorded that all the central banks should take relevant actions coordinately to stabilize the forex market movement at the Rambouillet summit in November 1975.