29 Mar 2016
Japan: Weaker yen failed to produce export gains - BBH
Research Team at BBH, suggests that it is widely recognized that the sharp depreciation of the Japanese yen has not lifted Japanese export volumes.
Key Quotes
“In December 2015, Japanese export volumes had fallen 4.4% year-over-year after rising 3.9% in December 2014 and 2.5% in December 2013.
These are a number of explanations for this counter-intuitive result given the yen's past depreciation. First, global demand is weak. Second, has adopted a direct investment strategy rather than an export-orientation. For example, many of the Japanese brand autos in on the US highways were produced in the US. Servicing foreign demand through local production may diminish exports. Third, Japanese producers did not risk antagonizing competitors may cutting prices to boost market share. Japanese producers were content to let the translation of foreign earnings boost the yen value of their revenue.
The weaker yen did not produce the kind of export gains that many economists, especially those who stress currency wars, had anticipated.”
Key Quotes
“In December 2015, Japanese export volumes had fallen 4.4% year-over-year after rising 3.9% in December 2014 and 2.5% in December 2013.
These are a number of explanations for this counter-intuitive result given the yen's past depreciation. First, global demand is weak. Second, has adopted a direct investment strategy rather than an export-orientation. For example, many of the Japanese brand autos in on the US highways were produced in the US. Servicing foreign demand through local production may diminish exports. Third, Japanese producers did not risk antagonizing competitors may cutting prices to boost market share. Japanese producers were content to let the translation of foreign earnings boost the yen value of their revenue.
The weaker yen did not produce the kind of export gains that many economists, especially those who stress currency wars, had anticipated.”