On the Choice of Invoice Currency by Japanese Exporters: The PTM Approach

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Abstract
This paper investigates why invoice ratios of the Japanese yen are relatively low for Japan's exports. Given "pricing-to-market"(PTM) behavior of Japanese exporters, we show that the demand conditions in the markets can explain the choice of invoice currency by Japanese exporters. In particular, our empirical evidence explains why yen-denominated invoice rations of TVs, VCRs, and automobiles are so low in exporting to the United States but are very high in exporting to the East Asian countries.
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