Fundamentally, this reflects firms’ efforts to capture demand in overseas economies with relatively high economic growth; however, it also appears to reflect that the persistent trend of the yen’s appreciation is accelerating such business activities. From an even longer perspective, developments in the yen’s exchange rate have shown large swings.
Looking back, the yen depreciated considerably toward the mid-2000s, mainly against the euro, against the background of yen carry trades (Chart 4). Following the Lehman shock, however, it started to appreciate rapidly.