The Internationalization of Yen and Key Currency Questions

Author/Editor:

Toru Iwami

Publication Date:

April 1, 1994

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The role of the yen in the International financial system is reconsidered from a comparative (historical) approach. Compared with the D-Mark in the postwar years, the limited use of the yen results not so much from regulations on capital movements as from the structure and behavior of Japanese economy. The history of the pound-sterling and the U.S. dollar reveals the fact that such factors as the network of foreign trade and economic size constitute the basis and “inertia” of a key-currency. Thus for a currency to rise to a key-position in global transactions, real factors are more decisive than financial market arrangement. Seen from the foreign economic relations, it is not possible for Japan to own a key-currency independent from the U.S. dollar.

Series:

Working Paper No. 1994/041

Subject:

Balance of payments Currencies Current account balance Exports Imports International monetary system International trade Money

English

Publication Date:

April 1, 1994

ISBN/ISSN:

9781451846034/1018-5941

Stock No:

WPIEA0411994

Pages:

96

Please address any questions about this title to publications@imf.org