Vehicle Currency Invoicing And Exchange Rate Pass-Through

Exchange rate pass-through has always been the core issue of domestic and foreign scholars.It has both theoretical research and empirical analysis.In theory,it is more focused on analyzing whether the exchange rate pass-through is complete and what factors affect the completeness of exchange rate pass-through.In the empirical study,the degree of influence of the bilateral exchange rate or effective exchange rate change of the importing and exporting country on the trade price is usually considered.The most important pricing and settlement currency in the world is the US dollar.This paper starts from the US dollar as a vehicle currency,and analyzes the influence of the RMB/Yen exchange rate,the RMB/US dollar exchange rate,and the Japanese yen/US dollar exchange rate on exchange rate pass-through,and tests whether the US dollar play a leading role in the exchange rate? This paper is based on the monthly unit value index of import trade compiled by the Japanese Ministry of Finance from January 2000 to October 2018.It uses OLS,panel VAR,and time series VAR to analyze and verify the overall unit value index and the sub-industry index respectively.The following conclusions are drawn:(1)Establishing the OLS equation for the exchange rate of the RMB/Yen exchange rate against the Japanese import unit value index,and found that the pass-through of the Chinese-Japanese bilateral exchange rate to the Japanese import unit value index is 52% in the short term and 90% in the long run.The paper also finds that there are differences in the transmission of Japanese exchange rate index to Japanese import value index in different industries.The transmission rate of chemical,clothing and fossil fuel industries is relatively high,and the long-term performance is excessive transmission;the transmission of food,products,raw materials and metal products is relatively moderate,with a long-term performance of 70%-90%;the transmission rate of mechanical equipment is low,with a short-term performance of 36.6% and a long-term performance of 54%.(2)Based on the US dollar as the vehicle pricing currency,the RMB/Yen exchange rate is divided into RMB/US dollar exchange rate,Japanese yen/US dollar exchange rate,and the RMB/USD exchange rate and the Yen/US dollar exchange rate are transmitted to the Japaneseimport unit value index.Equation,this paper finds that the RMB/US dollar exchange rate only has a transmission effect on the Japanese unit value index in the raw material industry,and is not significant in other industries;the yen/US dollar exchange rate plays a leading role in the exchange rate transmission,and the transfer coefficient and conclusion(The coefficients of 1)are very close.(3)The above conclusions are verified based on the panel and time series VAR model.The overall and sub-industry impulse response analysis and prediction variance decomposition results show that the Japanese import unit value index is most affected by its own impact,followed by the US dollar as a trading currency between China and Japan also has a significant impact on the Japanese import unit value index,Japan from The unit value index of China’s imports is more sensitive to changes in the yen/dollar than the yuan/dollar.