This paper examines pricing behavior of Japanese manufacturing. The pa
per evaluates the extent of pass-through in export prices and the rela
tive importance of pricing-to-market effect. The results show that Jap
anese exporters respond to the exchange rate variations by slow pass-t
hrough and also by price discriminate between domestic and foreign mar
kets. In contrast, German pass-through in export prices is nearly comp
lete. (C) Society for Policy Modeling, 1997.