I am really interested in the blog that Christina posted on Monday and I want to write about this topic as well. Japan is definitely an export-oriented country and the biggest single partner is the USA which imports more than one quarter of all Japanese exports. Japan exported 81.01 trillion yen (Around $900 billion) of goods and services to the foreign countries in 2008 and this number is about 21% of Japanese GDP. However, trade surplus decreased more than 80% in 2008 compare with 2007 since the yen has gained about 16 percent in 2008 against US dollars and also more than 10% against Euros.
Japanese trade statistics from 2004-2008:
http://www.customs.go.jp/toukei/shinbun/trade-st_e/2008/200828fe.pdf
In this sensitive time, I do not support Fujii's statement on September 24th which Japanese government appreciates strong yen and avoid the idea of easy intervention in the market. At least, I do not understand why he said it to the public. Because of the strong yen could decrease the demand of Japanese exports, it causes further damages for Japanese firms in this great recession. Moreover, because of the investors expect the damages to Japanese export-oriented companies, it gives negative effects for Nikkei 225 stock market.
Fujii said the government may act to stabilize the foreign exchange market and denied that he supported a stronger yen, a day after the currency surged to an eight-month high ($1 = 88yen). “If the currency market moves abnormally, we may take necessary steps in the national interest,” Fujii said at a news conference in Tokyo on September 29th. I hope the statement stabilize the foreign exchange market in Japan.
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