UID:
edocfu_9958077847902883
Format:
1 online resource (39 p.)
ISBN:
1-5135-1403-2
,
1-5135-9200-9
Series Statement:
IMF Working Papers
Content:
Three years have passed since the Bank of Japan’s asset purchase program was introduced in 2011, causing a sharp decline in the value of the Japanese Yen. What would be the implications for Japan and Korea’s exporters if the weak Yen is here to stay? We explore this question by examining exporters’ pricing behaviors and volume responses to exchange rate shocks. We find that if the weak Yen persists, it would strengthen Japan’s price competitiveness over time as export prices respond with a lag. We also find that while direct boosts to export demand will be rather limited, a persistently weaker Yen would expand the Japanese exporters’ profits lastingly, which could reinvigorate the ability, particularly of flagship exporting firms, to compete and grow in the global market over time. These findings suggest that the muted price and volume response so far to the sustained weakness of the Yen may mask a more fundamental shift in the relative competitiveness of Japanese and Korean exporters.
Note:
Description based upon print version of record.
,
Cover; Contents; I. Introduction; Boxes; 1. The Link between Yen and Korean Price Competitiveness; II. How Have Firms Responded so Far?; A. Price Pass-through and Volume Response; Tables; 1. Changes in Exchange Rate and Export Prices; Figures; 1. Exchange Rates of the Won and the Yen; B. Profit Margin and Stock Price; 2. Changes in Exchange Rate and Export Volume; 2. Consolidated Operating Margin Trend; C. What Happened to Market Shares?; 3. Exchange Rates and Profits; 4. Exchange Rates and Stock Prices; 5. World Market Share; III. How do Firms Adjust to Exchange Rate Shocks?
,
A. Are Profit Margins Absorbing the Exchange Rate Movements?6. Global Market Share Change Drivers; 7. Profit Margin Adjustment in Response to a 10 Percent REER Depreciation; 8. Responses to a 10 percent Depreciation: Japan vs. Korea; 2. Margin-Price Response to an Exchange Rate Shock; B. What Could Happen to Future Export Volumes?; Export Elasticity; 9. Short-Run and Long-Run Response of Export Volume; Out-of-sample Analysis; 10. Japan: Out-of-sample Forecasts for Export Volume; 11. Japan: Out-of-sample Forecasts for Export Prices; Scenario Analysis
,
12. Japan: Simulated Relative Export Margin13. Japan: Export Volume and Price Simulation; IV. What to Expect from Imported Contents?; 14. Korea's FVA by Source Country and Sector; 15. Korea's Foreign Value-Added (FVA); V. Conclusion; 3. Comparison of Japan Contents: Korea's Top Export Sectors; References; Appendixes; 1. Japan Export Volume Regression (DOLS): REER; 2. Japan Export Volume Regression (DOLS): Export Price; 3. Japan Export Volume Regression (Error-Correction Model) with REER; 4. Japan Export Volume Regression (OLS) with REER; 5. Korea Export Volume Regression (DOLS)
,
6. Korea Export Volume Regression (Error-Correction Model) with REER7. Korea Export Volume Regression (OLS) with REER; 8. What's Driving the Won/Yen Cross Rate?; 9. Estimation of PTM; Appendix Tables; A.1. Japan: Dynamic Ordinary Least Squares Estimation Results; A.2. Korea: Dynamic Ordinary Least Squares Estimation Results
Additional Edition:
ISBN 1-5135-1083-5
Additional Edition:
ISBN 1-5135-4339-3
Language:
English
