Weak economy and strong currency – the origins of the strong yen in the 1990's

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Dateien:
Aufrufstatistik

URI: http://nbn-resolving.de/urn:nbn:de:bsz:21-opus-24330
http://hdl.handle.net/10900/47505
Dokumentart: ResearchPaper
Date: 2001
Source: Tübinger Diskussionsbeiträge der Wirtschaftswissenschaftlichen Fakultät ; 218
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Yen , Japan , Wechselkursänderung
Other Keywords:
Yen , Yen/Dollar Exchange Rate , Foreign Exchange Intervention , Japan
License: Publishing license excluding print on demand
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Abstract:

During the 1990's the Japanese yen proved astonishingly strong despite the persisting recession. This paper tracks the origins of the high yen. It analyses the influence of interest rates, prices and foreign exchange policy on the yen-dollar exchange rate. It comes to the conclusion that real interest differentials can only explain shortterm exchange rate changes. Since prices have been exe rting their influence on the Japanese currency in the long run, the high yen is explained with deflation. The massive foreign exchange interventions of the 1990's were only able to stop the appreciation temporarily, if they were unsterilized, but they had no lasting effects.

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