Modern Currency Wars: The United States versus Japan
In 2013, through massive quantitative easing by the Bank of Japan (BOJ), the yen depreciated about 25% against the US dollar, stoking fears of Japan bashing by the US. However, this sharp depreciation simply restored the purchasing power parity of the yen with the dollar. Since 2008, quantitative easing by the BOJ has been similar to that carried out by the US Federal Reserve, the Bank of England, and the European Central Bank. So the BOJ can only be faulted as a currency belligerent if there is further significant yen depreciation. Led by the US, now all mature industrial countries are addicted to near-zero interest liquidity traps in both the short and long terms. Such ultra-low interest rates are causing lasting damage to the countries' financial systems, and to those of emerging markets, which naturally have higher interest rates. But exiting the trap creates a risk of chaos in long-term bond markets and is proving surprisingly difficult.
|Date of creation:||10 Oct 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Fax: (81-3) 3593-5571
Web page: http://www.adbi.org/
More information through EDIRC
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.:
- Gabriele Galati & Alexandra Heath & Patrick McGuire, 2007. "Evidence of carry trade activity," BIS Quarterly Review, Bank for International Settlements, September.
- Alan G. Ahearne & Naoki Shinada, 2005.
"Zombie Firms and Economic Stagnation in Japan,"
Hi-Stat Discussion Paper Series
d05-95, Institute of Economic Research, Hitotsubashi University.
- Angelo Ranaldo & Paul Söderlind, 2007.
"Safe Haven Currencies,"
University of St. Gallen Department of Economics working paper series 2007
2007-22, Department of Economics, University of St. Gallen.
- Masazumi Hattori & Hyun Song Shin, 2007. "The Broad Yen Carry Trade," IMES Discussion Paper Series 07-E-19, Institute for Monetary and Economic Studies, Bank of Japan.
- Habib, Maurizio Michael & Stracca, Livio, 2011.
"Getting beyond carry trade: what makes a safe haven currency?,"
Working Paper Series
1288, European Central Bank.
- Habib, Maurizio M. & Stracca, Livio, 2012. "Getting beyond carry trade: What makes a safe haven currency?," Journal of International Economics, Elsevier, vol. 87(1), pages 50-64.
When requesting a correction, please mention this item's handle: RePEc:ris:adbiwp:0437. 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: (Robert Hugh Davis)
If references are entirely missing, you can add them using this form.