1/1/2024 0 Comments Japanese exporterThe 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 Japan’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.įigure 1. Second, dollar invoicing is prevalent in Japan’s exports to Asia.First, Japanese exporters have a strong tendency to choose the importer’s currency for their exports to advanced countries such as the US and EU.Japan’s currency invoicing pattern puzzlingly differs from these stylised facts. Trade between advanced and developing countries are generally invoiced in the advanced country’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 don’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.
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