Decline of Japanese yen eventually harms Japanese economy,
which is stepping into crucial moment of regaining power for stable growth.
While small or mid-size businesses and individual consumption are two keys for
its revival, cheap yen adds unexpected cost on productive activity of
manufacturers and prevents consumers from purchasing goods. Having doubted on
possible manipulation, the government of Japan has exercised no effective
measures to cool enthusiastic market down.
New York Foreign Exchange marked ¥124.40 for $1 on Thursday.
That was the lowest value of Japanese yen against U.S. dollar for there twelve
years. Market dealers have been buying USD, responding to the expectation of
ending U.S. monetary easing later this year. With steep down of Japanese yen
for five consecutive days, its value was reduced ¥5 within a month.
Manufacturers basically welcome current trend. “It is
definitely a following wind for us manufacturers,” told Fumihiko Ike, President
of Car Industry Association. Cheap yen actually renders Toyota, Honda or
Nissan, competitiveness with lower price than other makers in Europe or America
in foreign markets.
Companies dealing with tourism also welcome cheap yen.
Travelers from Asian nations appear everywhere in Tokyo or other cities.
Retailers expect “explosive purchase of Chinese tourists who buy souvenir to
their relatives in China. Monthly foreign travelers t Japan in April exceeded
1.7 millions for the first time. Hotels have been securing firm interests even
they discounted room price.
But major companies that already shifted their factories to
oveseas have not received the benefit of volatile foreign exchange. “One yen of
decline worth seven billions yens of operational profit” said public affairs section
of Sony.
Machine factory has also been affected. “Cost for raw
materials such as aluminum and utility price had negative impact on our
balance,” said the manager of a machine parts producer. Being unable to
withstand costly procurement, a major bread bakery, Yamazaki, decided to raise
the price of 168 commodities by 2.6% in average. It is not unusual that a
customer disputes to a clerk about the price on their purchase with misunderstanding
on unexpectedly high price.
Economists predict further decline of Japanese yen along
with deliberation of Federal Bureau of Reserve on its turn to monetary
tightening. But some are worrying about excessive hike of U.S. dollar with
erosion of current growth. Fragile revival of Japan with weak asset investment
and individual consumption will soon be affected by U.S. economy.
No comments:
Post a Comment