"A Vulnerable Power in the World Economy: Japan's Economic Diplomacy and the Yen"

The volatile yen/dollar exchange rate has largely influenced Japan's business cycles and foreign economic relations from the 1980s. In particular to note is the triangular pattern of trade interdependence which appeared following the rising yen exchange rate and a increased scale of Foreign Direct Investments from Japan. Along with the post-bubble recession, however, the global position of the yen has also declined. The more international use of the currency, although recommended by policy-makers and economists, is limited because of the fact that Japanese economy stands on two pillars, the United States and East Asia, and the latter is more dependent on the former than on Japan.