Influence on Japanese Economic Policies on the Yen

JAPANESE FINANCIAL AND ECONOMIC POLICIES AND THE VALUE OF THE JAPANESE YEN IN INTERNATIONAL CURRENCY EXCHANGE

This study examines the influence of Japanese financial and economic policies on the value of the Japanese yen in international currency exchange. A variety of factors affects the exchange rate of a currency. There are four major types of market conditions that may be expected to affect foreign currency exchange rates under relevant conditions: changes in the value of exports and imports; differential rates of inflation; changes in domestic interest rates; and changes in foreign interest rates. The financial and economic policies adopted and followed by a country can affect each of these factors and, in turn, affect the value of its currency in international exchange (Yarbrough & Yarbrough, 2000).

If the value of a country's exports increases relative to the value of its imports, the value of the country's currency (other things being equal) tends to increase in the foreign currency exchange markets. Alternatively, if the value of imports increases relative to the value of exports, the value of the currency tends to decrease. Imports and exports determine a country's balance of trade, which in turn influences the country's balance of payments. When these projected patterns do not correctly describe a specific situation (such as a contrary scenario wherein there is a concurrent rise in a country's trade deficit and the val

Related Essays

East Asian Economic Development .... unilaterally attempting to influence trade relationships .... However, Japanese policies such as stable macroeconomic .... shaping East Asian economic development than .... (3647 15 )

Japan as an Economic Power .... the result that the Japanese influence over these .... increasingly interested in protectionist policies and a way .... the downfall of the Japanese economic system, nor .... (4041 16 )

Japan & Asia's Economic Development .... GDP, export requirements began to influence economic policies and, through .... this role in Asia's economic development in .... Japanese DFI policy is reviewed in this .... (9559 38 )

Globalization and Japan's Economy .... protection on both the political and economic fronts and is .... from the Gulf would impact the Japanese economy, which .... increase in the power and influence of China .... (3075 12 )

Japanese Foreign Investment in East Asia .... appreciation of the Japanese yen, the evidence .... export requirements began to influence economic policies and, through .... Japanese DFI and Opportunities For Future .... (9947 40 )

ket, which resulted in the end of absolute government control of interest rates in Japan. Japanese banks and securities firms were given formal authority for a market-rate funding mechanism for their bond purchases through the use of short-term repurchase agreements. Two provisions of the Foreign Exchange Law of 1980 were important to the integrating of Japanese domestic money markets with international markets. These provisions of the law were the authorizations (a) for Japanese banks to borrow and lend foreign currencies freely (both at home and abroad), subject only to financial prudence guidelines, and (b) for Japanese corporate enterprises to finance themselves abroad through borrowing denominated in foreign currency. In the mid-1980s, reforms were introduced that gave Japanese banks increased access to international markets. Prior to this liberalization, the Bank of Japan provided all funds required by Japanese commercial banks. In return, however, the commercial banks were required to adhere to domestic lending policies prescribed by the Bank of Japan. Banking reform in Japan has not ended the structure of separation between banking and credit intermediaries. Financial liberalization policies in Japan have been bala

Category: Economics - I