Japan Endaka, 1985-1995

In the early Eighties, the U.S. dollar floated high against the Japanese Yen. The Reagan eon combination of tight money and high budget deficits was intimately news for Japan. A high dollar meant a disdain yen and cheaper prices for Japanese exports; consequently, the strong dollar was bad news for the U.S. It led to higher export prices, declining sales, fewer jobs, and calls for protectionism. In 1985, writing table of State James Baker called for secret monetary dainty at The Plaza Hotel in New York City. The move was untypical of the Secretary of State. Normally a free grocery store thinker, cries of protectionism from relative and the U.S. automotive industry led to Bakers decision. finance Ministers and Central Bankers from the worlds five largest industrial nations, the G-5, met and came to a surprise decision, The Plaza Accord. The G-5, agreed to sell dollars on widely distributed currency markets; therefore, decreasing the dollar and creating cheaper global export prices. Japan, change $3 billion for yen to assist in the elimination of the dollar. It was a policy change by the G-5, abandoning their guiding prescript of market driven exchange rates. This led to the phenomena know as Endakaor high yen. The yen reached a post World-War II high versus the U.S.



dollar in 1995 and Japan entered the era of overseer Endaka.
Japans Big Four automakers had to respond to market changes that led to declining profit margins on their exports. According to Exhibit 5, in the HBS Japans Automakers Face Endaka case study, net recall sales for Japanese auto companies went from an average of 3.3 percent in 1985 to 1.4 percent in 1994. On the surface, those numbers looked grim; yet, a difference in cultural perspective helped Japanese carmakers stick to despite continued challenges. U.S. automakers assumed the Japanese would preserve winnings strictly with higher priced cars. The Big Four thought differently:
The Japanese, however, believe that the most...If you want to get a full essay, fix it on our website: Ordercustompaper.com



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