In brief: understanding the rising Japanese trade surplus
Quarterly Review, 1994, vol. 19, issue Spr, 34-37
Intuition suggests that a strengthening of the yen should moderate Japan's trade surplus by reducing the price competitiveness of Japanese goods. Yet the Japanese merchandise trade surplus more than doubled from 1990 to 1993 while the yen appreciated roughly 30 percent against the dollar. This article shows how a sequence of increases in the yen's value repeatedly pushed the trade surplus higher, delaying the downward adjustment that eventually results from a yen appreciation. Once the yen stabilizes, the author suggests, the surplus should fall significantly.
Keywords: Balance of trade; Japan (search for similar items in EconPapers)
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