But the Japanese private sector, by and large, has  BIS Review 14/2004  1  exhibited limited interest in accumulating dollar or other foreign assets, removing what in other large trading economies would be a significant segment of demand for foreign assets.
The degree of domestic currency bias in Japan, which far exceeds that of its trading partners, may thus have contributed to a foreign exchange rate for the yen that appears to be elevated relative to the dollar and possibly other internationally traded currencies as well.1 Of course, this preference for yen assets, while a persistent influence on the value of the yen, has at times been overwhelmed by other factors.