Snapshot for Japan BOJ Effective Exchange Rates - Real (BIS) (BOJXEXRB)

Rate Profile Information for BOJXEXRB

The effective exchange rate is an indicator that captures the international competitiveness of a currency, which cannot be measured by only examining bilateral exchange rates.The effective exchange rates of the Japanese yen is calculated as follows. The weighted average of the yen's exchange rate against other currencies is calculated using the relative importance -- which is measured by the total value of trade etc -- as its weights. *Methodology* The BOJ (bank) uses the 'broad-based' effective exchange rates of the Bank of International Settlement (BIS) for the latest effective exchange rates of the Japanese yen. For details on the 'broad-based' rates -- such as the compilation method, coverage, and weights -- see the BIS website (http://www.bis.org/statistics/eer/index.htm). As for effective exchange rates from January 1970 to December 1993, the bank estimates them retrospectively using the monthly rate of change of the BIS 'narrow-based' rates, since the BIS 'broad-based' rates are only available from January 1994. As of February 2010, the BIS calculates effective exchange rates of the Japanese yen against 56 countries (42 currencies) for 'broad- based' rates and 25 countries (15 currencies) for 'narrow-based' rates. The BIS uses the same compiling method to calculate effective exchange rates of other currencies, which enables data users to compare the international competitiveness of currencies based on a common standard. The bank's effective exchange rates, which are calculated using those of the BIS, naturally/also have the same feature.