Japanese exporters looking to boost shipments after the first monthly decline in more than a year can’t rely on a weaker yen for support, according to economists led by Mary Amiti of the Federal Reserve Bank of New York.
While depreciation typically favors exporters, a decline in the yen would boost the cost of the fuel imports needed by Japanese companies to manufacture products, according to a post today on the New York Fed’s Liberty Street Economics blog.
“Yen depreciation drives up the marginal costs of Japanese exporters,” Amiti wrote, with Oleg Itskhoki of Princeton University and Jozef Konings at University of Leuven. This “results in a smaller share of the depreciation being passed on into their export prices.”
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