A Yen bloc in Asia: An integrative approach

This paper studies the possibility of forming a yen bloc in Asia from four complementary approaches — (1) internationalization of the yen, (2) optimal peg for the Asian countries, (3) optimum currency areas, and (4) tripolar monetary system — which offer, respectively, Japanese, Asian, regional and global perspectives of the issue. The focus is on the implications of the formation of a yen bloc for macroeconomic stability in participating countries (including Japan itself) and the global economy. The Asian NIEs, which compete with Japan in international markets, are better candidates than the ASEAN countries and China to join a yen bloc.