Despite the low value of the yen since 2013, the
export response has been modest. This
disappointment partly owes to past offshoring of
production to the rest of Asia, which helped
develop regional value chains and shifted sales to
overseas subsidiaries. The transition to foreign
plants was led by the more productive enterprises
(Wakasugi et al. 2014). This offshoring trend
appears to have lowered Japan’s gross export
elasticity. Weakening external demand from the
rest of Asia also played a dampening role on
exports, as value-added trade between Japan and
other Asian countries intensified during the 2000s
(Ito and Wakasugi 2015).