Of course when the Japanese adopted a full accommodation monetary policy stance in the 90's, that resulted in a lower Yen (indirect) FXR, but that the way floating exchange rates are expected to work when a country has a sluggish economy and adopts a loose monetary policy.
Mind you, Japanese corporations went through a structural transition in the imported/domestic composition of their exports during the 1990's ... a major factor in the sluggish domestic economy in the 1990's ... so I guess someone could argue that they are embedding the neo-mercantalist monetary policy embedded in the Chinese and Southeast Asian into their exports via the imported component of their exports. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Upshot is that they can - and do, as I can state from personal experience - make manufacturing/import/export decisions based on their analysis of the mid-term, relative financial trends between their domestic economies and those of their 'clients'. paul spencer
