The Japanese Yen as an International Currency

IMF Working Papers, January 1, 1991

Source details

The role of the Japanese yen as an international currency is assessed.
Determinants of international-currency use imply some increase for the yen’s use in international finance; however, the implications for the yen’s use in international trade are mixed.
Despite Japan’s emergence as the world’s largest net creditor nation, Japan’s capital outflows have not significantly facilitated the yen’s internationalization.
Data are presented showing that, although the yen’s use as an international currency has increased, it is still rather modest.
Wider use of the yen as a regional currency in Asia has occurred, though a “yen-zone” does not appear to be emerging.

Increased use of the yen in international finance is implied by the determinants of international-currency use.
Mixed implications for the yen’s role in international trade.
Japan is described as the world’s largest net creditor nation during the period studied, but capital outflows have not materially advanced yen internationalization.
Regional adoption: wider use of the yen in Asia has been observed, without evidence of an emerging “yen-zone.”

Asia and Pacific
North America
Western Europe
Southeast Asia
Keywords listed: bond market, Bonds, Capital outflows, Currencies, deutsche mark, euro-yen bond, exchange rate, Exports, Inflation, pound sterling, single currency, U.S. dollar, unit of account, WP