2009 RIETI Survey on Currency Invoicing and Exchange Rate Risk Management of Japanese Firms

Author Name ITO Takatoshi  (Faculty Fellow, RIETI) /KOIBUCHI Satoshi  (Chuo University) /SATO Kiyotaka  (Yokohama National University) /SHIMIZU Junko  (Senshu University)
Creation Date/NO. June 2010 10-J-032
Research Project Monetary Cooperation and an Optimal Exchange Rate Basket in East Asia
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The currency invoicing patterns of firms in Japan is one of the most interesting research issues, because, unlike other developed countries, it is not the yen but the U.S. dollar that plays a major role in currency invoicing of Japanese trade. However, detailed data on the invoicing choice is not available, presenting a major obstacle to rigorous empirical examination.

To overcome such a lack of data, we sent a questionnaire to all TSE (Tokyo Stock Exchange) listed firms in the manufacturing industry in September 2009, and received questionnaire responses from 227 firms. The questionnaire covers various information not only on the firms' invoicing choice by industry, destination, and type of trading partners, but also on the firms' foreign exchange rate risk management. The survey results are classified by industry and firm size, using annual securities reports of sample firms, through which new evidence on the firm's invoicing choice is presented. Our findings provide significant implications for further economic integration and monetary arrangements in the region.