Japanese firms want government action if yen weakens

By Tetsushi Kajimoto

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Hence the problems with Abenomics in general, and with trying to manage the yen in particular. The weak yen may be good for export-oriented companies, but the domestic-focused ones are getting killed. Prices for these firms' raw materials are going up, as are their energy costs. And since the big companies, who are benefitting from the weaker yen, are not raising wages, the domestic companies cannot raise prices. They are truly bewteen a rock and a hard place.

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It's a somewhat misleading headline.

55% of firms don't want action until around 115 yen to the dollar, or weaker. Only 45% of companies want action at around 110 to the dollar.

Those firms expecting the government to do something should pull their own proverbial fingers out and start currency hedging for themselves.

Intervention is an almost entirely useless tool. The government might get a short term bang for their bucks but the market forces at play will still persist and the exchange rate will revert back to pre-intervention levels. And the government doesn't have unlimited dollars to keep buying yen with forever anyway.

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So these companies whinging and moaning about the yen now at under 110 must have been poo ing their panties prior to 2008 and the lehman shock when the yen was bouncing around 120.

It is a weak argument coming from these hollow entities.

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It is a weak argument coming from these hollow entities.

I'm loving this weak yen! But let's face it, it only benefits a very small portion of the population, and most of these are the elite. The common man, and non-exporters are being screwed.

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Well, now people complain about it, but before a weak or weaker yen was the norm.

Weird how now people become vocal and before there was no noises about the weak yen.

It isn't very hard for anyone now days to increase or supplement their income in a world with yahoo auctions and computers, buying and selling things can realise cash, and that is without getting into currency trading or the share market.

There is always a group of people who would moan and groan, even if you gave them a wrinkled $20 note they would still moan coz the note wasn't a fresh new one.

Get off your asses if you don't like the way things are instead of just grizzling .

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as ive said before the yen should be around 110~120 level this a balance between imports cost and exports being more competetive on the world market. anything below 100 will just drive more money out of Japan through cheaper imports. Japan was built on more exports than imports. not th other way around

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More proof that corporate welfare is at an all-time high. The private sector can't do anything anymore without demanding the govt grant it favors and privileges.

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I keep hearing about higher fuel costs, but have you seen the price of oil recently? It is low and getting lower, and none of those lower costs are being passed on to the consumer. I just read that kerosene will be at an all time high this winter. Thanks a lot monopolizing oil companies!

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MarkX, interesting about kerosene, I hadn't heard that.

The price of oil that is down is that priced in US dollars, but the yen has fallen in US dollar terms recently too. I think a lot of those producers have likely entered hedging contracts to protect against rises/falls in cost of inputs, which is why the prices for consumers mightn't change so quickly. But it does seem that prices are quicker going up than they are going down...

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But let's face it, it only benefits a very small portion of the population, and most of these are the elite. The common man, and non-exporters are being screwed.

You may have come down from another planet. Japan domestic market is not sufficient for Japanese firms for surviving. Weak Yen will make Japanese export more competitive. It is good for Japanese export. Therefore it is good for employment. Since J Yen has fallen, rival Korean and Taiwan firms have to find the strategy for not shrinking their export market. Higher employment rate means more and more tax income for nation.

On the other hand, weak Yen will make cash rich investors will get low return. Outbound Tourists will get less money from foreign currency exchange. Imported materials and energy will be more expensive. Exporters have to absorb the low margin instead of passing to the consumers. It is the double edge of sword for economy.

Back in 1980s, J Yen was about three times lower than now. However Japan enjoyed the golden age of prosperity. Majority of common people shared the success of export boom. Unemployment rate was negligible. Weak Yen is good within the acceptable and reasonable range.

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These comparisons of the yen at 107ish now versus 140 or 200 years and decades ago don't really tell us much, because the relative value of other currencies has been eroded due to higher inflation abroad in the interim. Apparently, after adjusting for inflation differentials over the years, the yen is relatively very weak now at 107ish.

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