#Japanese currency exchange rates full

These studies typically use data on the share of currency invoicing at a country level (Goldberg and Tille 2008, Kamps 2006) whereas destination- or industry-level data is rarely used. There has been a growing literature on the determinants of currency invoicing.

As shown in Figure 1, however, the share of yen invoicing has not shown a steady upward trend from 1983. When the yenвЂ™s internationalisation was actively debated up to the mid-1990s, it was expected that the use of the yen would be growing as a trade invoice currency if intra-firm trade increased between Japan and Asia. Japanese firms have expanded overseas business especially in Asia and have built a regional production network over the last two decades. On the other hand, in response to the sharp appreciation of the yen with respect to the dollar in the mid-1980s, Japanese firms accelerated the shift toward overseas production, and cross-border intra-firm transactions increased substantially.

#Japanese currency exchange rates full

The yen became a fully convertible currency and is still the only currency in Asia that meets the full convertibility. On one hand, since the Foreign Exchange and Controls Law was amended in 1980, numerous attempts have been made to liberalise internal and external financial transactions in Japan for the purpose of promoting the yenвЂ™s internationalisation further, especially the use of the yen in trade transactions. The puzzle takes on another dimension when we consider the internationalising process of Japanese firms and the yen over the last three decades. Source: Bank of Japan, Yushutsu Shinyojo Tokei (Export Letter of Credit Statistics) MITI, Yushutsu Kakunin Tokei (Export Confirmation Statistics) MITI, Yushutsu Hokukosho Tukadate Doko (Export Currency Invoicing Report) MITI, Yushutsu Kessai Tsukadate Doko Chosa (Export Settlement Currency Invoicing) the website of Japan Customs. The September data is used for 1992-97, the March data for 1998, and the 2nd half of the year data for 2000-09. Notes: The data for 1999 is not available. The share of the yen and dollar invoicing in JapanвЂ™s exports (%)

As shown in Figure 1, the share of dollar invoicing is higher than that of yen invoicing in exports to Asia from 2006 to 2009.ДЇigure 1. Second, dollar invoicing is prevalent in JapanвЂ™s exports to Asia.First, Japanese exporters have a strong tendency to choose the importerвЂ™s currency for their exports to advanced countries such as the US and EU.JapanвЂ™s currency invoicing pattern puzzlingly differs from these stylised facts. Trade between advanced and developing countries are generally invoiced in the advanced countryвЂ™s currency. According to the 'stylised facts' on the choice of invoice currency, which are based on 1970s empirical research such as Grassman (1973) and Page (1977), trade between two advanced countries tends to be invoiced in the exporter's currency. Japan is well known for its unique pattern of trade invoicing. That raises the question: Why donвЂ™t Japanese firms invoice their exports in yen to avoid sudden losses of profits? This has been the story many times in the past, and the story is repeating itself now. Whenever the yen appreciates substantially, Japanese exporters scream and the government becomes under pressure to do something.