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Manufacturing is still critical to the economy United States. Clyde Prestowitz, says it's time to start realizing the positive spillovers that manufacturing creates... Read more  

Events & Activities

Stephen Olson at Chinese Development Institute Conference

 

 Clyde Prestowitz giving presentation to CDI...

 

Steve Olson teaching trade negotiations at the Mekong Institute...

 

Stephen Olson to speak at upcoming workshop organized by the International Institute for Trade and Development on 

"Economics of GMS Agricultural trade in goods and services towards the world market"

Chiangmai, Thailand Sep 8-12.

Country and Area Studies

The Yens Appreciation and the Nature of the Policy Debate in Japan

Click Here to Download the Full Report in PDF Format

On June 24, 1994, in an attempt to stem the fall of the dollar, President Clinton and Treasury Secretary Bentsen stated in no uncertain terms that the U.S. wants a stronger dollar, not a stronger yen. The U.S. monetary authorities made their presence felt in the foreign exchange market, intervening heavily in order to keep the dollar from falling further. The U.S. Federal Reserve also raised interest rates six times since the beginning of the year.

In spite of such concerted efforts by the United States, the yen-dollar rate failed to respond. This failure confirmed something very important: that the strong yen has little to do with the United States and has everything to do with Japan. After all, if the strong yen was master-minded in Washington as many were led to believe, such a clear statement from the White House should have been sufficient to turn the situation around. The fact that it didn't suggests that Washington had no bearing on the exchange rate from the very beginning, and that the causes behind the strong yen have always had their roots in Japan.

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