INTERNATIONAL POLITICAL ECONOMY OF THE JAPANESE YEN: SAFE-HAVEN AND FUNDING DUALITY IN THE GLOBAL MONETARY HIERARCHY

Summary

The international political economy of the Japanese yen is examined as a case of secondary-currency power in a dollar-centred hierarchy, where global status is shaped less by episodic “events” than by the co-evolution of institutions, market infrastructure, and macro-financial cycles. Standard internationalisation indicators are treated as outcome measures, and the observed paradox – moderate routine use alongside intense crisis salience – is explained through a safe-haven/funding duality that operates as a regime-like morphodynamics. Yen “funding” phases are shown to arise from persistent low rates, hedged outward portfolio allocation, and cross-currency basis dynamics, whereas “haven” phases are activated endogenously through the unwind of yen-funded leverage and offshore positioning. A longue durée perspective links these cycles to phase shifts in liberalisation, post-bubble retrenchment, and unconventional policy, while the infrastructural layer (safe assets, offshore/onshore access, and backstops) is identified as enabling but not sufficient for outcome internationalisation. The analysis further specifies transmission channels – balance-sheet, portfolio-yield spillovers, crisis activation, and redistribution – and distils governance principles for non-hegemonic currencies in a more plural monetary order.