Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Dollar Exposure of Japanese Companies

Contents:

Author Info

  • Dominguez, Kathryn M.

Abstract

The bulk of Japanese exports and imports are denominated in dollars rather than Japan's local currency, the yen.The consequences of dollar invoicing depend importantly on whether Japanese companies hedge their dollar exposures. If Japanese companies are able fully to hedge their dollar exposures either by using derivative products, locating production in the United States or matching dollar revenues with dollar costs then the choice of invoicing currency will not influence the yen profits of Japanese companies. This paper estimates the degree to which Japanese companies are exposed to movements in the dollar using Japanese stock market data and an international version of the CAPM model to estimate the extent to which Japanese company returns are correlated with changes in the yen-dollar exchange rate.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6WMC-45J5C7M-5/2/0fd502818bf12706d8263aab5d2b2d7b
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 12 (1998)
Issue (Month): 4 (December)
Pages: 388-405

as in new window
Handle: RePEc:eee:jjieco:v:12:y:1998:i:4:p:388-405

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622903

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Shin-ichi Fukuda & Ji Cong, 1994. "On the Choice of Invoice Currency by Japanese Exporters: The PTM Approach," Discussion Paper Series, Institute of Economic Research, Hitotsubashi University a289, Institute of Economic Research, Hitotsubashi University.
  2. Jorion, Philippe, 1990. "The Exchange-Rate Exposure of U.S. Multinationals," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 63(3), pages 331-45, July.
  3. Grassman, Sven, 1976. "Currency distribution and forward cover in foreign trade : Sweden revisited, 1973," Journal of International Economics, Elsevier, Elsevier, vol. 6(2), pages 215-221, May.
  4. Grassman, Sven, 1973. "A fundamental symmetry in international payment patterns," Journal of International Economics, Elsevier, Elsevier, vol. 3(2), pages 105-116, May.
  5. Marston, Richard C., 1990. "Pricing to market in Japanese manufacturing," Journal of International Economics, Elsevier, Elsevier, vol. 29(3-4), pages 217-236, November.
  6. Jia He & Lilian K. Ng, 1998. "The Foreign Exchange Exposure of Japanese Multinational Corporations," Journal of Finance, American Finance Association, American Finance Association, vol. 53(2), pages 733-753, 04.
  7. Yusuru Ozeki & George S. Tavlas, 1992. "The Internationalization of Currencies," IMF Occasional Papers, International Monetary Fund 90, International Monetary Fund.
  8. Joseph E. Gagnon & Michael M. Knetter, 1992. "Markup Adjustment and Exchange Rate Fluctuations: Evidence From Panel Data on Automobile Exports," NBER Working Papers 4123, National Bureau of Economic Research, Inc.
  9. Bartov, Eli & Bodnar, Gordon M, 1994. " Firm Valuation, Earnings Expectations, and the Exchange-Rate Exposure Effect," Journal of Finance, American Finance Association, American Finance Association, vol. 49(5), pages 1755-85, December.
  10. Bodnar, Gordon M. & Gentry, William M., 1993. "Exchange rate exposure and industry characteristics: evidence from Canada, Japan, and the USA," Journal of International Money and Finance, Elsevier, Elsevier, vol. 12(1), pages 29-45, February.
  11. Nance, Deana R & Smith, Clifford W, Jr & Smithson, Charles W, 1993. " On the Determinants of Corporate Hedging," Journal of Finance, American Finance Association, American Finance Association, vol. 48(1), pages 267-84, March.
  12. Magee, Stephen P & Rao, Ramesh K S, 1980. "Vehicle and Nonvehicle Currencies in International Trade," American Economic Review, American Economic Association, American Economic Association, vol. 70(2), pages 368-73, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Dominguez, Kathryn M.E. & Tesar, Linda L., 2006. "Exchange rate exposure," Journal of International Economics, Elsevier, Elsevier, vol. 68(1), pages 188-218, January.
  2. Friberg, Richard & Wilander, Fredrik, 2007. "Price Setting Transactions and the Role of Denominating Currency in FX Markets," Working Paper Series, Sveriges Riksbank (Central Bank of Sweden) 201, Sveriges Riksbank (Central Bank of Sweden).
  3. Joscha Beckmann & Ansgar Belke & Michael Kuehl, 2013. "Foreign Exchange Market Interventions and the $-¥ Exchange Rate in the Long Run," ROME Working Papers, ROME Network 201307, ROME Network.
  4. Ananda Jayawickrama & Tilak Abeysinghe, 2007. "Exchange Rate Exposure of Sectoral Returns and Volatilities : Evidence from Japanese Industrial Sectors," Microeconomics Working Papers 21925, East Asian Bureau of Economic Research.
  5. ITO Takatoshi & KOIBUCHI Satoshi & SATO Kiyotaka & SHIMIZU Junko, 2013. "Exchange Rate Exposure and Exchange Rate Risk Management: The case of Japanese exporting firms," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 13025, Research Institute of Economy, Trade and Industry (RIETI).
  6. Jayasinghe, Prabhath & Tsui, Albert K., 2008. "Exchange rate exposure of sectoral returns and volatilities: Evidence from Japanese industrial sectors," Japan and the World Economy, Elsevier, Elsevier, vol. 20(4), pages 639-660, December.
  7. Ayako Saiki, 2005. "Asymmetric Effect of Currency Union for Developing Countries," Open Economies Review, Springer, Springer, vol. 16(3), pages 227-247, July.
  8. Hsu, Chih-Chiang & Yau, Ruey & Wu, Jyun-Yi, 2009. "Asymmetric Exchange Rate Exposure and Industry Characteristics : Evidence from Japanese Data," Hitotsubashi Journal of Economics, Hitotsubashi University, Hitotsubashi University, vol. 50(1), pages 57-69, June.
  9. Bartram, Söhnke M. & Bodnar, Gordon, 2005. "The Exchange Rate Exposure Puzzle," MPRA Paper 6482, University Library of Munich, Germany.
  10. Hartmann, Philipp, 1998. "The Currency Denomination of World Trade after European Monetary Union," Journal of the Japanese and International Economies, Elsevier, Elsevier, vol. 12(4), pages 424-454, December.
  11. Tian Yong Fu & Mark J. Holmes & Daniel F.S. Choi, 2011. "Volatility transmission and asymmetric linkages between the stock and foreign exchange markets: A sectoral analysis," Studies in Economics and Finance, Emerald Group Publishing, Emerald Group Publishing, vol. 28(1), pages 36-50, March.
  12. Entorf, Horst & Jamin, Gösta, 2002. "Dance with the Dollar: Exchange Rate Exposure on the German Stock Market," Darmstadt Discussion Papers in Economics, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL) 18198, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jjieco:v:12:y:1998:i:4:p:388-405. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.