Experiences And Lessons From Yen’s Internationalization

A rise of the country’s economy in global status must be accompanied by the international aspirations of the local currency, for the internationalization of money can give the country considerable mint tax and make the currency exchange rate stable, avoid the risk of fluctuations in the economy, make convenient to finance for investment and other functions. However one country’s monetization largely depends on the power of the country’s economic, financial market liberalization, the international economic environment, national policy orientation and so on. Monetary internationalization is a long-term process, effecting by various factors.After the World War II, Japan was developing rapidly, becoming the second largest economy after United States. To pursuit the status of their currency match the status of their economic and the currency internationalization gains, Japan came up with yen internationalization. After decades of development, we can see yen, compared to the euro and the dollar, is small in using in the economic trade, the foreign exchange reserves of the world trade and the international financial markets, yen does not accord with Japan’s economic and also does not get the expected benefits.In recent years, along with the Chinese high economy speed, the foreign trade is growing, foreign exchange reserve is increasing, and the status of RMB in the world is promoted step by step. RMB internationalization is the trend. Especially after the Asian financial crisis in1997, RMB has been concerned from then.After the RMB exchange rate reformed in2005, forcing by outside pressure, the RMB has rised by29%. RMB exchange is coming through a hard time. How to promote the process of internationalization of RMB under the premise of stable and open financial markets are the difficulties, which China is now facing.Otherwise, Japan has shared many similarities in the international road.This article studies the yen internationalization process and current situation, concluding the reasons for the failure of yen internationalization.The article compares the yen internationalization and the RMB internationalization surroundings for some experiences and lessons, which come from the process of yen internationalization failureThis paper is divided into six parts, the first is the introduction, introducing the research background and the significance of this paper, and also introduced the article’s content and framework as well as innovation and deficiencies. The second part introduces the basic currency of international content as well as the current status of the major currencies on the international. This part is the theoretical foundation part, from which we can understand the content of currency internationalization. The third part discusses the process of internationalization of the yen, divided from the different attitude from the Japanese government.Before the Asian financial crisis in1997,the Japanese government is a negative view of the internationalization, But after that the Japanese government’s changed their attitude into a positive one, and vigorously promote the internationalization of yen. From this chapter, we can understand the general content of the yen internationalization process, which plays a fundamental role in the subsequent analysis. The fourth part is divided into two parts, the first one introduces three aspects status of the internationalization of yen, and then analyzed the reasons for the failure of the internationalization of yen. A country’s currency internationalization failure is the result of a variety of factors, both in Japan and also international. The fifth part introduces the current situation of the internationalization of RMB, and then analyzes the similarities and differences between the internationalization of yen and the internationalization of RMB from the domestic and international conditions. Based on the comparisons of these conditions, we can be clearly aware of the strengths and weaknesses of RMB, which plays a guiding role in the future of the internationalization road of RMB. The last part comes up with some specific measures by analysizing the failure of yen internationalization.In all, the internationalization of the RMB is a long process, China needs to make use of their strengths, make efforts to improve the unfavorable conditions to create a good society and international environment for the internationalization of the RMB. At the same time, we should also learn from the experience of the failure of yen to avoid failure.