chapter
4 Pages

Introduction

In spite of such a sharp appreciation of the yen, Japan’s current account surplus has continued to grow since 1981, while the United States has experienced current account deficits since 1982. In addition, from 1986 on, Japan sold a large volume of US dollars in the foreign exchange market to cause the US dollar rate to depreciate. Nevertheless, Japan's external reserves continued to increase and surpassed those of the United States by 1987 and West Germany by 1988. In April 1989, the external reserves of Japan, the United States, and West Germany were $100,361 million, $50,303 million, and $60,642 million, respectively.