Returns to Japanese investors from US investments

This paper provides the first detailed measures of losses to Japanese investors from US investments. Over the period 1977-1994, nominal currency losses from Japanese investments amounted to about $260 billion. However, these losses should rather be measured on an opportunity cost basis, i.e. in terms of foregone opportunities in the Japanese market. Using this benchmark, economic currency losses still amounted to about $200 billion. These losses were primarily caused by the sustained appreciation of the yen, which was associated with massive US-Japan bilateral trade deficits.