The Domestic Politics of the Yen's Re-internationalisation: Dynamic Interaction and the Core Executive.

Domestic political factors are often overlooked in discussions about the determinants of currency internationalisation. By studying the re-internationalisation of the Yen, our research found that the dynamic interactive mechanism between policy actors has a profound impact on the overall course of d...

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Published in:Asian Studies Review Vol. 45; no. 3; pp. 489 - 509
Main Authors: Lu, Chang Rong, Wang, Yue, Liu, Lian
Format: Article
Published: Taylor & Francis Ltd Sep2021
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Online Access:View this record in EBSCOhost
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        10.1080/10357823.2020.1841736
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        atl: The Domestic Politics of the Yen's Re-internationalisation: Dynamic Interaction and the Core Executive.
      aug:
        au:
          Lu, Chang Rong
          Wang, Yue
          Liu, Lian
        affil:
          Tongji University
          Sun Yat-sen University
          Asian Development Bank Institute
      su:
        Japanese yen
        Globalization
        Koizumi, Jun'ichirō, 1942-
        Budget
        Japan
      sug:
        subj:
          Japan
          Japanese yen
          Globalization
          Koizumi, Jun'ichirō, 1942-
          Budget
      keyword:
        core executive
        currency internationalisation
        dynamic interactive mechanism
        Prime Minister-controlled policy process
        resource exchange
        Yenre-internationalisation
      ab: Domestic political factors are often overlooked in discussions about the determinants of currency internationalisation. By studying the re-internationalisation of the Yen, our research found that the dynamic interactive mechanism between policy actors has a profound impact on the overall course of domestic currency internationalisation. In the case study, along with the establishment of the "Prime Minister-controlled" model, the "bureaucrat-controlled" policy process of Yen re-internationalisation led by the Ministry of Finance (MOF) experienced substantial intervention by the Prime Minister and related influences. The case study shows that Koizumi exerted pressure on the MOF and the Bank of Japan (BOJ) via budgeting power and the flexible use of resources. Moreover, the MOF and the BOJ relied on accumulated professional financial experience and the resources of legally binding independence in financial policy to successfully safeguard organisational interests and core policy concepts. Our research shows that resource exchange between the three entities helped the Prime Minister to minimise policy confrontation effectively while objectively promoting the interdependence of fiscal, monetary and financial policies, which drove sharp change in the Yen re-internationalisation policy and its long-term outlook. This case study of Japan suggests ongoing concern about the increasing politicisation of the distinctly professionalised currency internationalisation policy.
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    language: English
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