THE IMPACT OF CROSS EXCHANGE RATE VOLATILITY ON JAPAN’S FOREIGNTRADE: A GRAVITY MODEL APPROACH
Tabetando Rayner Phd candidate, National Graduate Institute for Policy Studies (GRIPS) 7-22-1 Roppongi, Minato-ku, Tokyo 106-8677 Japan Tell: +81 80 94 31 19 86 E-mail:
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Bounoung Fouda, Phd International Relations Institutes of Cameroon
Khamidova Nodira UNSW Business school, Australia
CITATION: Tabetando, R., Bounoung F. and Khamidova N. (2014). The impact of Cross exchange rate volatility on Japan’s foreign trade: A gravity model approach. International Journal of Social Sciences and Entrepreneurship, 3 (1), 53-63.
ABSTRACT
This paper examines Japan’s foreign trade with focus on the impact of cross exchange rate volatility on Japan’s foreign trade volume for the period 1980 to 2012. It uses a gravity equation framework. Theresult indicates that volatility has a negative and significant effect on Japan’s exports volumes while imports volumes are positively affected by volatility. This paper recommends a shift from float to managed float regime.
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