CRS Says Yen Appreciation Could Adversely Affect Japanese Exports to U.S.
The Congressional Research Service has issued a report on the bilateral economic issues between the U.S. and Japan related to the credit crisis and economic recession.
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According to the report, Japan is the U.S.’ second-largest export market and second-largest source of imports. Japanese firms are the U.S.’ second-largest source of foreign direct investment, and Japanese investors are the second-largest foreign holders of U.S. treasuries, helping to finance the U.S. deficit and reduce upward pressure on U.S. interest rates.
However, the CRS states the economic problems in Japan and the U.S. associated with the credit crisis and the related economic recession will likely dominate the bilateral economic agenda for the foreseeable future. The value of the yen has appreciated and has hit 15-year highs in terms of the U.S. dollar, which could adversely affect Japanese exports to the U.S. and other countries, contributing to the downturn in Japanese economic growth.
(See ITT's Online Archives or 11/22/10 news, 10111941, for BP summary of an previous CRS report on bilateral trade issues between the U.S. and Japan.
(CRS RL33436, dated 03/24/11)