The Process And Factors Of Internationalization Of Japanese Yen

Japan, as the second superpower in the world, has further accelerated its economic growth in 1980s. As the surplus of Japan in its trade with the USA expanded rapidly, the trade friction between the two was increasingly intensified. Japan became the biggest creditor both in trade and current account in the world in 1985, while the USA was the largest debtor. Therefore, it was said that Japan posed a threat to the USA in bilateral economic imbalance. On the background of the domestic and international situation, Japan and the USA proposed together the "Internationalization of Yen". In 1984, Japan and the USA set up the "Dollar & Yen Committee" and published "Dollar & Yen Committee Report". The Ministry of Finance of Japan also published "The Status and the Prospects of Financial Liberalization and the Internationalization of Yen". These two reports formally presented "Internationalization of Yen". Since then, the Internationalization of Yen experienced three periods, including the stage from the proposal of strategy in middle 1980s to the early 1990s when the "Japanese economic bubble" cracked; and the following stage from then to the eruption of Asian financial crisis in the later 1990s; and then the third stage of post financial crisis of East Asia with the new orientation of Internationalization of Yen, accompanied by the diversion of international trade and investment of Japan from Europe to Asia.In today's world, a serious economic imbalance appears in the external economy again. The global financial crisis erupted. The U.S. economy faces recession and the huge twin deficits are more and more difficult to maintain. The dollar-based international monetary system is also being questioned. China's economic growth has led the world for 30 years to maintain growth of around 10%. China becomes the largest trade deficit origin of the U.S. for its rapid growth in exports, so the bilateral imbalance of BOP between them is more obvious. The world economy seems to experience the same things as 30 years ago, so under the voice of International Monetary System Reform and the pressure of dollar-oriented foreign exchange reserves in China, exploring the "Internationalization of Yen" means great significance to "Internationalization of RMB".Firstly, with the indexes of international currency functions, this paper analyzes the process of internationalization of yen, including its strategic shift from international to Asia. Secondly, it explores the shift of the international trade and investment, as well as the relationship between it and the yen's development in Asia. Finally, it points out some prerequisites of internationalization of yen and other currencies, including the trade scale, capital outflow and the international monetary system. It also gives the enlightenment to "Internationalization of RMB" in the respect of trade and finance.