What explains frequent exchange-rate interventions in East Asia? This study asks whether organized export interests prompt policymakers to devalue currencies and presents evidence from Japan and Korea using news-based measures of exporters’ public pressure. The authors build a proxy for exporter lobbying from daily reports in leading financial newspapers and apply machine-learning scaling to trace how industry demands evolve before interventions. Their contribution is a novel measurement strategy linking publicized industry demands to episodes of currency depreciation.
Proxy measure of exporter lobbying Machine-learning scaling of news Focus on Japan and Korea
Data and methods
The authors focus on Japan and, in a robustness check, Korea, drawing on twenty-five years of daily reporting in leading financial newspapers (the Nihon Keizai Shimbun and the Hankyung). Because direct measures of lobbying are unavailable, they construct a proxy from news reports and scale those reports with machine-learning techniques to generate time-series indicators of exporters’ public pressure. The paper links these indicators to episodes of exchange-rate intervention and depreciation.
Main findings
Using the news-derived lobbying proxy, the authors report that rising public pressure from organized export industries precedes interventions and is associated with subsequent currency depreciation. The abstract frames this as evidence that exporters’ mounting public demands induce intervention rather than as definitive causal proof.
- The association is established using news-based measures scaled by machine learning across daily reports.
- Results are presented for Japan with a robustness check using Korean newspaper evidence.
