business

Business circles mixed about Japan's intervention amid industry shift

4 Comments

Business circles expressed mixed feelings about Japan's currency intervention Thursday, with some hailing it as a sign of the government's determination to stem the rapid fall of the yen while others raised questions about its effectiveness.

Masakazu Tokura, head of the Japan Business Federation, the country's biggest business lobby, welcomed the yen-buying intervention. "It means a lot that the government showed its will to not leave speculative moves in the currency market unattended," he told reporters.

Some company officials in the restaurant industry expressed skepticism over the government's action as the industry has struggled with the soaring costs of imported foods on the back of the war in Ukraine.

"It wouldn't reduce our costs much even if (the intervention) helped strengthen the yen to some extent," one of them said.

Another one said, "We will see if it can really curb the weakness in the yen."

Fumiya Kokubu, head of the Japan Foreign Trade Council, an industry organization for trading houses, has called into question the often-touted benefit of a weaker yen in boosting Japanese exports.

"Japan's industry structure has shifted to the type (that earns more from) overseas investment from one (depending on) exports," Kokubu, chairman of Marubeni Corp, told a press conference Wednesday.

An official at a major machinery maker said a weaker yen still works to help lift earnings when overseas profits are repatriated.

So the intervention "could affect long-term business outlook in anticipation of the yen's depreciation."

© KYODO

©2022 GPlusMedia Inc.

4 Comments
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Japan has not been good for over thirty years and counting.

And….

An official at a major machinery maker said a weaker yen still works to help lift earnings when overseas profits are repatriated.

Which company because the other 99% are doing JS!

-1 ( +0 / -1 )

The yen fluctuations have always been of great interest, not only for myself but for the economy as a whole. I am fascinated with the basic love\ hate situation. When the yen is so weak like right now, factories that create products from raw material get to clear their warehouses, and profits soar, foriegn investment and tourism comes pouring in where its allowed, and basically the people, entities and markets manager that have lots of capital get to move cash around and so, make short term profits and long term investments. But, the domestic economy suffers higher prices and usually no or low income increases in the short or long term. It can also lower the public‘s opinon of themselves which ultimately leads to less spending in domestic markets, this can and normally does lead to higher interest rates and a sticking money under the matress mentality. Good or bad, Its all one neverending cycle, but very interesting.

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I commented recently that JT commenters collective wisdom would make better policy than the clowns in charge, and that was reinforced yesterday.

BOJ policy does exactly what it was crafted and intended to do with the LDP/Japan Inc. combine cohorts.

Balancing the interests of asset holders with a QE basic income for the financial industry and rentier capital holders.

With the interests of Japan Inc. export based firms.

The interests of workers, small business are utterly inconsequential to them.

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There is nothing speculative about the yen’s plunge.

It is entirely a consequence of dopey policies. And now they are cluelessly trying to paper it over.

I commented recently that JT commenters collective wisdom would make better policy than the clowns in charge, and that was reinforced yesterday.

1 ( +1 / -0 )

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