Invoice Currency Choice and Exchange Rate Risk Management in Japanese Firms' Trade Network:"RIETI Survey on Japanese Overseas Subsidiaries 2010"

Author Name ITO Takatoshi  (Faculty Fellow, RIETI) /KOIBUCHI Satoshi  (Chuo University) /SATO Kiyotaka  (Yokohama National University) /SHIMIZU Junko  (Senshu University)
Creation Date/NO. November 2011 11-J-070
Research Project Research on Exchange Rate Pass-Through
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This paper provides a summary of the invoice currency choice and the exchange rate risk management of Japanese overseas subsidiaries based on the questionnaire survey sent and responded in August 2010. Our survey results show that the growing overseas production and sales network promotes U.S. dollar invoicing rather than Japanese yen invoicing, especially in Asia. Regarding currency risk management, most of the Japanese overseas subsidiaries, particularly located in Asia, manage currency risk on the basis of their own judgment. Under the circumstance that the world economy faces a turning point, these findings will give us important insights into the desirable currency regime of Asian countries and also provide meaningful policy implications for possible monetary cooperation in the region.