SHINJI TAKAGI () (Graduate School of Economics, Osaka University, 1-7 Machikaneyama, Toyonaka, Osaka 560-0043, Japan)
Abstract
The paper reviews Japan's exchange rate policy from the end of the Bretton Woods era to the present. The Japanese authorities used various tools to manage the yenâdollar exchange rate over much of this period. The most dominant was official foreign exchange intervention, which in most instances took the form of "leaning against the wind". Capital controls were also used but, with full capital account convertibility, ceased to exist as an instrument of exchange rate policy by the mid-1980s. Following the post-Plaza appreciation of the yen, the authorities eased monetary policy to arrest the appreciating pressure. The possible role of exchange rate policy in the great asset inflation that followed, however, remains unanswered. More recently, exchange rate policy during the period of prolonged stagnation and fragile recovery was made subordinate to the overall stance of macroeconomic policy. In this regard, particularly striking in terms of scale and frequency was the "great intervention" of 2003â2004. Equally striking has been the total absence of official intervention since. It would require a renewed substantial volatility of the yen to know whether this indeed marks a permanent shift in Japan's exchange rate policy.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
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.