Research On The Characteristics Of Japanese Yen Internationalization Under The US Dollar Standard System

The internationalization of Japanese yen is a long process of interaction with economy and finance,which has gone through two main stages: negative and positive.The main measures to promote are capital internationalization and financial liberalization,and the construction of a developed financial market.The internationalization of the yen is not only subject to the dollar standard,but also depends on Japan's own economic and financial conditions.The Japanese yen has become an international currency,but it is not an international standard currency,and it is also a major international foreign exchange trading currency and a safe haven currency.First of all,after long-term efforts to internationalize the Yen,the Yen has grown into an international currency,but it is not an international standard currency.The internationalization of the Japanese yen is fundamentally different from the reform of the international monetary system in which the dollar replaced the pound's international standard currency status.The internationalization of the Japanese yen is carried out under the dollar standard.The United States cannot allow the Yen to challenge the status of the dollar as the international standard currency.Japan does not have the economic status of a world superpower.Its economic size is only 1 / 4 of that of the United States,and its foreign trade is only 40% of that of the United States.However,Japan is,after all,the second largest economy in the western world.Driven by measures such as capital internationalization and financial liberalization,the Japanese yen has finally become a non-standard international currency,which is commensurate with Japan's economic status.Second,the Japanese yen has become the main currency of international foreign exchange transactions.Compared with the trade clearing currency and the international reserve currency,the Yen as the main international foreign exchange transaction currency is a major feature.The main reasons for the low use of Japanese yen in trade clearing are the market structure of trade,commodity structure,exchange rate and exchange cost,as well as the traditions and habits of transactions.However,the Japanese yen has always been the third largest trading currency in the international foreign exchange market,and USD/JPY currency pair has always been the second largest currency pair.The asymmetry of Japanese yen's international monetary function reflects the characteristics of Japan's capital-exporting country.In the 1980 s,Japan has become the largest net creditor country in the world.Japan enables non-residents to raise Japanese yen funds through European yen bonds,Japanese yen foreign bonds,European loans,Japanese yen foreign loans and so on.Japan makes large-scale securities investment and direct investment overseas,and the net export of capital makes the Yen an important international financial currency,thus promoting the Yen to become the main trading currency in the international foreign exchange market.Finally,the Yen is one of the three safe-haven currencies.The US dollar and the Swiss franc are recognized as safe-haven currencies in the international investment community.Economic and political powers are the reasons why the US dollar has become a safe-haven currency.Sense of security,an asset given to clients by neutral countries,is the main reason why the Swiss franc has become a safe-haven currency.The risk aversion function of the Yen was discovered by the international investment community and recognized and proved by the theorists mainly after the financial crisis in the United States.Retrospective studies show that the role of the Yen as a hedge was earlier than in the early 1990 s.Both literature research and empirical research have confirmed the existence of the risk aversion function of Yen.Japan's low interest rates,long-term price stability and the strength of the exchange rate have made the Yen the best financing currency,and the carry trade has become the main reason for the Yen's safe-haven currency.portfolio adjustment has become a common behavior of investors,thus driving up the exchange rate of the Yen.Not only the arbitrage trade,the existence of portfolio risk exposure,in the event of risk events,it is also necessary to rebalance the portfolio,which leads to the rise of the Yen exchange rate.In addition to non-Japanese international economic,political and other risks that will lead to the risk aversion of the Yen,natural disasters such as the Japanese earthquake,which originally belong to Japan,will also lead to risk aversion,thus promoting the rise of the Yen exchange rate."moving capital back to Japan" is another manifestation of the Japanese yen risk aversion mechanism,which can be explained by the lack of domestic demand in Japan,the existence of a huge amount of overseas investment,the development of the insurance industry and other economic and financial structures.The rise of the Yen driven by risk aversion events has nothing to do with cross-border capital flows.Foreign exchange transactions among Japanese residents and foreign exchange transactions between nonresidents can well explain that exchange rate changes have nothing to do with cross-border capital flows.The result of the internationalization of Japanese yen under the dollar standard has three major characteristics,namely,the international currency of non-standard currency,the main currency of foreign exchange transaction and the currency of risk aversion.Among the three,they are cause and effect and complement each other.The currency of foreign exchange trading largely supports the status of the Japanese yen as an international currency,and the safe-haven currency greatly increases the foreign exchange trading volume of the Yen and the diversification of trading varieties.