Figure 1.7.1
Yen Effective Exchange Rates Movement
(Index; 2010 = 100)
1980:Q1
81:Q3
83:Q1
84:Q3
86:Q1
87:Q3
89:Q1
90:Q3
92:Q1
93:Q3
95:Q1
96:Q3
98:Q1
99:Q3
2001:Q1
02:Q3
04:Q1
05:Q3
07:Q1
08:Q3
10:Q1
11:Q3
13:Q1
14:Q3
140
120
100
80
60
40
20
Yen nominal effective exchange rate
Yen real effective exchange rate
Sources: CEIC Data Co. Ltd.; and IMF staff calculations.
Figure 1.7.2
Developments in Yen/Won Cross Exchange
Rate and Won Real Effective Exchange Rate
(Index; 2010 = 100)
Yen/Won cross exchange rate
Won real effective exchange rate (right scale)
0.011
120
0.010
110
100
0.009
90
0.008
80
0.007
70
Sources: CEIC Data Co. Ltd.; and IMF staff calculations.
14:M4
14:M1
13:M10
13:M7
13:M4
13:M1
12:M10
12:M7
12:M4
2012:M1
0.006
60
Figure 1.7.3
Japan and Korea Export Volume and Yen Real
Effective Exchange Rate
(Index; 2010 = 100)
Yen real effective exchange rate
Korea export volume (right scale)
Japan export volume
(right scale)
110
100
90
80
Sources: CEIC Data Co. Ltd.; and IMF staff calculations.
14:Q3
13:Q3
12:Q3
11:Q3
10:Q3
60
2009:Q3
70
130
120
110
100
90
80
70
60
50
40
30
Figure 1.7.4
Relative Profit Margin Movements and Yen Real
Effective Exchange Rate
(Index)
Yen real effective exchange rate
Korea profit margin (right scale)
Japan profit margin (right scale)
120
2010 = 100
110
100
90
80
15:M1
14:M1
13:M1
12:M1
11:M1
10:M1
60
09:M1
70
20
15
10
5
0
–5
–10
–15
–20
Sources: CEIC Data Co. Ltd.; and IMF staff calculations.
Note: Profit margin is defined as local-currency-denominated export price
minus domestic price.
Figure 1.7.5
Profit Margin Adjustment in Response to a 10 Percent Real Effective Exchange Rate Depreciation
(Percent)
1. Transportation
2. Metal
2
0
0
Long-term
profit margin
Initial
adjustment
Long-term
profit margin
Initial
adjustment
Long-term
profit margin
Initial
adjustment
Long-term
profit margin
Japan
Korea
4
2
Korea
6
4
Japan
8
6
Japan
10
8
Korea
10
Korea
12
Japan
12
Initial
adjustment
4. Textile
3. Electronics
10
10
8
8
6
6
4
4
Sources: CEIC Data Co. Ltd.; and IMF staff estimates.
Korea
Korea
Long-term
profit margin
Japan
Initial
adjustment
0
Japan
Long-term
profit margin
Korea
Initial
adjustment
Korea
Japan
0
Japan
2
Initial
adjustment
Long-term
profit margin
Initial
adjustment
Long-term
profit margin
Figure 1.7.6
Short- and Long-Term Responses to a
10 Percent Real Effective Exchange Rate
Depreciation across Export Sectors
(Percent)
1. Short-term response 2. Long-term response
2
0
0
Sources: CEIC Data Co. Ltd.; and IMF staff estimates.
Transportation
4
2
Korea
Textile
6
4
Transportation
8
6
Textile
10
8
Electronics
10
Metal
12
Electronics
Japan
Korea
Metal
Japan
12
Figure 1.7.7
Japan versus Korea: Responses to a 10 Percent
Real Effective Exchange Rate Depreciation
(Percent)
2. Korea
4
2
2
0
0
Transportation
6
4
Textile
8
6
Electronics
10
8
Metal
10
Short term
Sources: CEIC Data Co. Ltd.; and IMF staff estimates.
Long term
Transportation
12
Textile
Long term
Electronics
12
Short term
Metal
1. Japan