ABSTRACT
The US government, particularly the Department of the Treasury, became directly involved in the reform of the Japanese financial markets. Through the early 1980s, reform of the Japanese financial system amounted to an entirely Japanese affair. With reform efforts within Japan stymied, primarily over divisions within the Japanese financial community, including the bureaucracy, the Treasury acted as a catalyst that overcame domestic inertia. The most immediate impetus for the Yen/Dollar Accord was the perceived misalignment in the value of the yen. During the early 1980s, the value of the dollar had surged, with US exports becoming more expensive in foreign markets. The yen/dollar team from the very beginning wanted a document long on specifics. Whatever immunity remained for the Japanese financial system from foreign intervention came to an abrupt end in the 1980s. In the 1970s and early 1980s, merchandise and agriculture received most of the attention from US trade negotiators.
