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A Vulnerable Power in the World Economy: Japan's Economic Diplomacy and the Yen


  • Toru Iwami

    (Faculty of Economics, University of Tokyo)


The volatile yen/dollar exchange rate has largely influenced Japan's business cycles and foreign economic relations from the 1980s. In particular to note is the triangular pattern of trade interdependence which appeared following the rising yen exchange rate and a increased scale of Foreign Direct Investments from Japan. Along with the post-bubble recession, however, the global position of the yen has also declined. The more international use of the currency, although recommended by policy-makers and economists, is limited because of the fact that Japanese economy stands on two pillars, the United States and East Asia, and the latter is more dependent on the former than on Japan.

Suggested Citation

  • Toru Iwami, 2000. "A Vulnerable Power in the World Economy: Japan's Economic Diplomacy and the Yen," CIRJE F-Series CIRJE-F-73, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2000cf73

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    References listed on IDEAS

    1. Campbell, John Y., 1987. "Stock returns and the term structure," Journal of Financial Economics, Elsevier, vol. 18(2), pages 373-399, June.
    2. Leung, Mark T. & Daouk, Hazem & Chen, An-Sing, 2000. "Forecasting stock indices: a comparison of classification and level estimation models," International Journal of Forecasting, Elsevier, vol. 16(2), pages 173-190.
    3. Bessembinder, Hendrik & Chan, Kalok, 1995. "The profitability of technical trading rules in the Asian stock markets," Pacific-Basin Finance Journal, Elsevier, vol. 3(2-3), pages 257-284, July.
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