IDEAS home Printed from https://ideas.repec.org/a/ris/ambsrv/0040.html
   My bibliography  Save this article

Exchange Rate Pass-Through into Japanese Import Prices: Evidence at Both Bilateral and Product Levels

Author

Listed:
  • Khun, Channary

    (International Fund for Agricultural Development, Rome, Italy)

  • Lim, Sokchea

    (ohn Carroll University, Ohio, U.S.)

  • Basnet, Hem

    (Methodist University, North Carolina, U.S.)

Abstract

This study investigates the degree of the exchange rate pass-through to Japanese bilateral import prices at the product level for major Japan's trading partners (US, EU, and Asian NIEs) for a period (1998:1-2010:12) dubbed as Japan's lost decade and marked by a gradual the exchange rate appreciation against the US dollar. By considering both country and product dimensions in a unified framework, this study makes one of the first attempts to analyze the responsiveness of Japanese import prices to exchange rate movement. The empirical analysis suggests a declining exchange rate pass-through to Japanese import prices at the bilateral level in some product categories but increasing in others. However, we find no evidence of the changes in exchange rate pass-through for manufacturing, machinery, and overall product level for each of these partners. Our finding sheds light on the recent decline in exchange rate pass-through to Japanese multilateral import prices and helps calibrate its trade relationship with its partner countries.

Suggested Citation

  • Khun, Channary & Lim, Sokchea & Basnet, Hem, 2021. "Exchange Rate Pass-Through into Japanese Import Prices: Evidence at Both Bilateral and Product Levels," American Business Review, Pompea College of Business, University of New Haven, vol. 24(2), pages 115-132, November.
    • Handle: RePEc:ris:ambsrv:0040
    as

    Download full text from publisher

    File URL: https://digitalcommons.newhaven.edu/cgi/viewcontent.cgi?article=1435&context=americanbusinessreview
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pinelopi Koujianou Goldberg & Michael M. Knetter, 1997. "Goods Prices and Exchange Rates: What Have We Learned?," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1243-1272, September.
    2. Deirdre Daly & Rebecca Hellerstein & Christina Marsh, 2006. "Have U.S. import prices become less responsive to changes in the dollar?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 12(Sep).
    3. Jane E. Ihrig & Mario Marazzi & Alexander D. Rothenberg, 2006. "Exchange-rate pass-through in the G-7 countries," International Finance Discussion Papers 851, Board of Governors of the Federal Reserve System (U.S.).
    4. José Manuel Campa & Linda S. Goldberg, 2005. "Exchange Rate Pass-Through into Import Prices," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 679-690, November.
    5. Guillaume Gaulier & Amina Lahrèche-Révil & Isabelle Méjean, 2008. "Exchange-rate pass-through at the product level," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 425-449, May.
    6. Delatte, Anne-Laure & López-Villavicencio, Antonia, 2012. "Asymmetric exchange rate pass-through: Evidence from major countries," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 833-844.
    7. Giovanni P. Olivei, 2002. "Exchange rates and the prices of manufacturing products imported into the United States," New England Economic Review, Federal Reserve Bank of Boston, issue Q 1, pages 3-18.
    8. Amit Ghosh & Ramkishen Rajan, 2009. "What is the extent of exchange rate pass-through in Singapore? Has it changed over time?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 14(1), pages 61-72.
    9. Jimborean, Ramona, 2013. "The exchange rate pass-through in the new EU member states," Economic Systems, Elsevier, vol. 37(2), pages 302-329.
    10. Douglas Steel & Alan King, 2004. "Exchange Rate Pass-through: The Role of Regime Changes," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(3), pages 301-322.
    11. Shintani, Mototsugu & Terada-Hagiwara, Akiko & Yabu, Tomoyoshi, 2013. "Exchange rate pass-through and inflation: A nonlinear time series analysis," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 512-527.
    12. Matthieu Bussière & Simona Delle Chiaie & Tuomas A Peltonen, 2014. "Exchange Rate Pass-Through in the Global Economy: The Role of Emerging Market Economies," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 62(1), pages 146-178, April.
    13. Jon Faust & Joseph E. Gagnon & Mario Marazzi & Jaime R. Marquez & Robert F. Martin & Trevor A. Reeve & John H. Rogers & Nathan Sheets & Robert J. Vigfusson, 2005. "Exchange rate pass-through to U.S. import prices: some new evidence," International Finance Discussion Papers 833, Board of Governors of the Federal Reserve System (U.S.).
    14. Ceglowski, Janet, 2010. "Exchange rate pass-through to bilateral import prices," Journal of International Money and Finance, Elsevier, vol. 29(8), pages 1637-1651, December.
    15. Civcir, Irfan & Akçaglayan, AnIl, 2010. "Inflation targeting and the exchange rate: Does it matter in Turkey?," Journal of Policy Modeling, Elsevier, vol. 32(3), pages 339-354, May.
    16. Jui-Chuan Chang & Ching-Chuan Tsong, 2010. "Exchange Rate Pass-Through and Monetary Policy: A Cross-Commodity Analysis," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(6), pages 106-120, November.
    17. Nguyen Van Phuc & Vo Hong Duc, 2021. "Macroeconomics Determinants of Exchange Rate Pass-Through: New Evidence from the Asia-Pacific Region," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(1), pages 5-20, January.
    18. Otani, Akira & Shiratsuka, Shigenori & Shirota, Toyoichiro, 2003. "The Decline in the Exchange Rate Pass-Through: Evidence from Japanese Import Prices," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 21(3), pages 53-81, October.
    19. Ceglowski, Janet, 2010. "Has pass-through to export prices risen? Evidence for Japan," Journal of the Japanese and International Economies, Elsevier, vol. 24(1), pages 86-98, March.
    20. Jiménez-Rodríguez, Rebeca & Morales-Zumaquero, Amalia, 2016. "A new look at exchange rate pass-through in the G-7 countries," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 985-1000.
    21. Haroon Mumtaz & Özlem Oomen & Jian Wang, 2006. "Exchange rate pass-through into UK import prices," Bank of England working papers 312, Bank of England.
    22. Yanamandra, Venkataramana, 2015. "Exchange rate changes and inflation in India: What is the extent of exchange rate pass-through to imports?," Economic Analysis and Policy, Elsevier, vol. 47(C), pages 57-68.
    23. Kassi, Diby François & Sun, Gang & Ding, Ning & Rathnayake, Dilesha Nawadali & Assamoi, Guy Roland, 2019. "Asymmetry in exchange rate pass-through to consumer prices: Evidence from emerging and developing Asian countries," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 357-372.
    24. Linda S. Goldberg & José Manuel Campa, 2010. "The Sensitivity of the CPI to Exchange Rates: Distribution Margins, Imported Inputs, and Trade Exposure," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 392-407, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiménez-Rodríguez, Rebeca & Morales-Zumaquero, Amalia, 2016. "A new look at exchange rate pass-through in the G-7 countries," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 985-1000.
    2. Beirne, John & Renzhi, Nuobu & Panthi, Pradeep, 2024. "Exchange rate pass-through in emerging Asia and exposure to external shocks," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1608-1624.
    3. Ozkan, Ibrahim & Erden, Lutfi, 2015. "Time-varying nature and macroeconomic determinants of exchange rate pass-through," International Review of Economics & Finance, Elsevier, vol. 38(C), pages 56-66.
    4. Chou, K.W., 2019. "Re-examining the time-varying nature and determinants of exchange rate pass-through into import prices," The North American Journal of Economics and Finance, Elsevier, vol. 49(C), pages 331-351.
    5. Diby François Kassi & Dilesha Nawadali Rathnayake & Akadje Jean Roland Edjoukou & Yobouet Thierry Gnangoin & Pierre Axel Louembe & Ning Ding & Gang Sun, 2019. "Asymmetry in Exchange Rate Pass-Through to Consumer Prices: New Perspective from Sub-Saharan African Countries," Economies, MDPI, vol. 7(1), pages 1-33, January.
    6. Kassi, Diby François & Sun, Gang & Ding, Ning & Rathnayake, Dilesha Nawadali & Assamoi, Guy Roland, 2019. "Asymmetry in exchange rate pass-through to consumer prices: Evidence from emerging and developing Asian countries," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 357-372.
    7. Gust, Christopher & Leduc, Sylvain & Vigfusson, Robert, 2010. "Trade integration, competition, and the decline in exchange-rate pass-through," Journal of Monetary Economics, Elsevier, vol. 57(3), pages 309-324, April.
    8. Berner, Eike, 2011. "Exchange rate pass-through: New evidence from German micro data," Economics Working Papers 2011-01, Christian-Albrechts-University of Kiel, Department of Economics.
    9. Antonia López-Villavicencio & Valérie Mignon, 2020. "Exchange rate pass-through to import prices: accounting for changes in the eurozone trade structure," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 835-858, November.
    10. Nidhaleddine Ben Cheikh & Christophe Rault, 2016. "Recent estimates of exchange rate pass-through to import prices in the euro area," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 69-105, February.
    11. Ceglowski, Janet, 2010. "Exchange rate pass-through to bilateral import prices," Journal of International Money and Finance, Elsevier, vol. 29(8), pages 1637-1651, December.
    12. Jose Manuel Campa & Linda S. Goldberg, 2008. "Pass-Through of Exchange Rates to Consumption Prices: What Has Changed and Why?," NBER Chapters, in: International Financial Issues in the Pacific Rim: Global Imbalances, Financial Liberalization, and Exchange Rate Policy, pages 139-176, National Bureau of Economic Research, Inc.
    13. Bussière, M. & Delle Chiaie, S. & Peltonen, T. A., 2013. "Exchange Rate Pass-Through in the Global Economy," Working papers 424, Banque de France.
    14. Anderl, Christina & Caporale, Guglielmo Maria, 2023. "Nonlinearities in the exchange rate pass-through: The role of inflation expectations," International Economics, Elsevier, vol. 173(C), pages 86-101.
    15. Nguyen Van Phuc & Vo Hong Duc, 2021. "Macroeconomics Determinants of Exchange Rate Pass-Through: New Evidence from the Asia-Pacific Region," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(1), pages 5-20, January.
    16. Zakaria Moussa, 2016. "How big is the comeback? Japanese exchange rate pass-through assessed by time-varying FAVAR," Post-Print hal-03714934, HAL.
    17. Andrés González & Hernán Rincón & Norberto Rodríguez, 2008. "La transmisión de los choques a la tasa de cambio sobre la inflación de los bienes importados en presencia de asimetrías," Borradores de Economia 532, Banco de la Republica de Colombia.
    18. Robert J. Vigfusson & Nathan Sheets & Joseph Gagnon, 2009. "Exchange Rate Passthrough to Export Prices: Assessing Cross‐Country Evidence," Review of International Economics, Wiley Blackwell, vol. 17(1), pages 17-33, February.
    19. Joseph E. Gagnon & Nathan Sheets & Robert J. Vigfusson, 2007. "Exchange rate pass-through to export prices: assessing some cross-country evidence," International Finance Discussion Papers 902, Board of Governors of the Federal Reserve System (U.S.).
    20. Andrés González & Hernán Rincóm & Norberto Rodríguez, 2008. "La transmisión de los choques a la tasa de cambio sobre la inflación," Borradores de Economia 5089, Banco de la Republica.

    More about this item

    Keywords

    Exchange Rate Pass-Through; Japanese Bilateral Import Prices;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:ambsrv:0040. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Amber Montano (email available below). General contact details of provider: https://edirc.repec.org/data/cbnhaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.