IDEAS home Printed from https://ideas.repec.org/a/taf/uitjxx/v39y2025i3p206-228.html
   My bibliography  Save this article

Forward Exchange Market Transitional Policy Modeling: The Case of the Japanese Yen

Author

Listed:
  • David Hudgins
  • Patrick M. Crowley

Abstract

This study explores the forward exchange market aspects for the gradual pivot of the Bank of Japan away from its unconventional expansionary monetary policies that depressed interest rates, depreciated the yen, and resisted deflation. This combination permitted the profitable “yen carry trade,” where investors borrowed in yen and invested (mainly) in US denominated assets. This study develops a dynamic continuous time model of the forward exchange market for the trading of the Japanese yen and the US dollar to analyze the emergence of a stricter Japanese monetary policy stance with higher interest rates aimed at combating a more inflationary environment.

Suggested Citation

  • David Hudgins & Patrick M. Crowley, 2025. "Forward Exchange Market Transitional Policy Modeling: The Case of the Japanese Yen," The International Trade Journal, Taylor & Francis Journals, vol. 39(3), pages 206-228, May.
    • Handle: RePEc:taf:uitjxx:v:39:y:2025:i:3:p:206-228
    DOI: 10.1080/08853908.2025.2469869
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/08853908.2025.2469869
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/08853908.2025.2469869?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:uitjxx:v:39:y:2025:i:3:p:206-228. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/uitj20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.