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Yen surge threatens Japanese companies: Abe

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..and Abenomics is the only solution!

4 ( +5 / -1 )

if it hurts stop playing with the yen.

6 ( +7 / -1 )

Yes let's respond quickly to anything that threatens Japanese companies and work and sacrifice more for their well-being!!!

5 ( +6 / -1 )

These central planners are the cause of all the volatility - look what has happened since Abe's man Kuroda stepped in.

Another cracker was last years unpegging of the Swiss Franc to the Euro which unleashed all kinds of mayhem.

2 ( +4 / -2 )

Friends in the import business might disagree, especially the ones hardest hit by Abe's drive to drive up the yen into the 120~130 range.

And, really, aren't most companies in the import business? Even the ones Abe loves import resources to build their cars and ... Sony? Who is buying Sony products these days?

5 ( +6 / -1 )

And, really, aren't most companies in the import business? companies are in the import business to get the materials required o make the products they sell , or necessary items like food / oil. Importers of foreign made goods eg car electronics etc just sucks money out of Japan, not to mentions the 100,000s jobs and tax revenues lost as a result. Japanese exporters actually make Japans trade surplus and keep jobs tax revenues in Japan, all major world economies were built on manufacturing exports, NOT IMPORTS. So please all the importers complaining unless your business creates surplus wealth domestically in Japan as a result of your imported materials/goods you not really helping the J-economy much

-4 ( +1 / -5 )

Get ready for BoJ to start selling the mountain of yen they have printed over the last 18 months.

1 ( +2 / -1 )

In normal situations, the value of currency depends on the amounts of different currency being held in different countries. When you buy Chinese products, China acquires dollars, yen, euros, or whatever. And as this happened, the amount of yuan held in Japan, America, and Europe decreases. China exchanges it's foreign holdings to buy yuan, because it needs it's own currency to pay it's own bills, and use for transactions in it's domestic economy. When foreign currency exceeds domestic currency, domestic currency strengthens, and foreign currency weakens. The market does a good job at maintaining the real value of the world's currencies.

Why isn't the yen weakening? Mainly because Japan's economy is closed. Japan does not import large numbers of goods into the country, imported cars make up only 7% of cars on the road, and we already know how the cost of imported food and other goods is pushed up. In this situation, Japan holds much more yen than it does foreign currencies. Many may think that the fact that most of Japan's debt is domestically held is a good thing, except that this practice also drives up the value of the yen. And all of this is especially true because although many people think Japan's economy is export-based, most of what Japanese companies produce is in fact domestically consumed.

So long as Japan's market remains closed, and there is not a free exchange of goods and currencies, the yen is going to be stronger than it otherwise would.

1 ( +4 / -3 )

Yes let's respond quickly to anything that threatens Japanese companies and work and sacrifice more for their well->>being!!!

Be sure govt will do something & quick, because we know who are really managing the country behind the clan, who are staking up scandal after scandal and are never convicted of any crimes,who are receiving/diverting huge money stimulus, who are driving the yen policy, who are pushing for weaponry business and unsafe nuclear plants, who are running monopolies and price fixings on Japanese consumers, who are allowed to do their own regulation and own inspection, who the government is so afraid of (or in bed with) that it will not disclose name of a source reporting a 25 years of repeated wrongdoings because well, it is sensible matter....

1 ( +3 / -2 )

wtfjapan,

Importers of foreign made goods eg car electronics etc just sucks money out of Japan

Yeah, but "trade" has to be bi-directional. What's the point of money if you can't spend it? Japan can't be a black hole for capital where it goes in, but never comes out.

The problem isn't that a trade or capital account surplus works to appreciate the currency (it's just a natural consequence when having a free-floating currency), the problem is that Japan's economy lacks the dynamism needed to adjust to that higher value of the yen.

Japan has had decades to adjust to a higher value of the yen, but the politicians want to keep pretending that Japan is still a developing country that depends on manufacturing. That's BS. Japan can be more than that.

not to mentions the 100,000s jobs and tax revenues lost as a result.

If old export oriented companies go out of business, there's some short term pain for those involved in such shutdowns, but companies going out of business is a normal thing when they are no longer producing valuable, competitive products. And when they go out of business, that means capital and labour is freed up and becomes available to get put to work in new businesses.

The problem is Japan doesn't have many new businesses, not that old ones might go bankrupt.

Also, tax revenues don't come just from exporters. The consumption tax is a more stable source of tax revenue than individual and corporate (both exporters and importers) income taxes.

3 ( +5 / -2 )

is Sony an exporting giant?

0 ( +1 / -1 )

Yes please sink the Yen. It was the Americans who asked us to appreciate the Yen, we followed and we got 20 years of recession. Isn't our allies great!

-1 ( +2 / -3 )

Jaoanese currency manipulation (again) by the end of next week.

0 ( +3 / -3 )

but the politicians want to keep pretending that Japan is still a developing country that depends on manufacturing. That's BS. Japan can be more than that. look at all the strong economies of the world they have very strong export orientated business eg Germany/China, all the ones that use to have strong manufacturing and have lost it to cheaper rivals now run large deficits eg UK France US. Japan can't rely on domestic consumption as there population is shrinking while the US has strong domestic consumption and strong manufacturing mostly due to cheap Japanese Chinese credit it still hasn't stopped them running a $500billion/year trade deficit, excluding the wars the continue to fight. No, its pretty simple economics actually bring in more money than you send out, and spend within your means. Buying foreign made goods, while may be cheaper/desirable is only supporting foreign jobs/workers and the tax revenues generated going to the country involved. and just adding to Japanese sinking syndrome

-1 ( +1 / -2 )

BOJ must intervene,its aggressive speculations,it has nothing to do with Japan economy.All opinions shown are not true.i would appreciate if you can have a look on technical analysis of yen first for better understanding.

-6 ( +0 / -6 )

More foreigners will stay and work in Japan if the yen is high (and complain about the work culture). More foreigners will come as tourists if the yen is low (and express their adoration of Japan).

-1 ( +1 / -2 )

As someone who lived in Japan during the economic crisis and got paid in dollars as the yen hit it's highest value on record (75.8/$1) , I can honestly say everyone needs to chill a little bit. If you look back over the last 20 years, 110/$1 +/-3 yen is very standard.

1 ( +1 / -0 )

This lowers the profits, but does not hurt that much, exporters. It is a much needed boon for importers and the rest of us. Exporters have had it too good to long from an articially deflated yen. Let them experience what we consumers have.

Oh yes, a high yen might boost domestic demand.

2 ( +3 / -1 )

“At the forex market, excessive volatility or disorderly moves could give adverse impact and therefore the stability in the currency rate is important.

Thats funny - why didnt the Abe/Aso "Brains trust" voice similar concerns when volatility saw the yen move in the OPPOSITE direction - on a bigger scale - in the past 1-2 years? Now all of a sudden it has become "disorderly moves"/"drastic fluctuation".

The markets lost all confidence in Abe/Aso and their dud arrows long ago.

1 ( +2 / -1 )

@TheTiger

Yes please sink the Yen. It was the Americans who asked us to appreciate the Yen, we followed and we got 20 years of >recession. Isn't our allies great!

Bingo! After seeing what the Japanese went through, you can't blame the Chinese for not wanting the RMB to strengthen too much. It devastated Japan, and it would have done the same to China, or anyone else who accedes to the American's demand.

Remember, the US may take care of you, but not before it takes care of itself first.

2 ( +3 / -1 )

Importers of foreign made goods eg car electronics etc just sucks money out of Japan

This is one of the biggest misconceptions that people have. When a Japanese company or individual buys goods from overseas, where do you suppose those yen eventually end up? Do they stay overseas where people use them to barter for goods or pay their taxes in a foreign currency? Absolutely not. They immediately return to Japan in the form of overseas capital investment. (Or more accurately, the money never leaves when you consider how the global banking system operates)

In reality, importers are actually exporters. But rather than cars or steel, the products they export are little pieces of cotton paper with pretty pictures on them that have almost no intrinsic value (Japanese currency). The fact that foreigners are willing to exchange real tangible goods for pieces of paper is one of the greatest sources of Japan's wealth. It's why America has not gone bankrupt even though they run massive trade deficits year after year.

-3 ( +0 / -3 )

Exporters have had it too good to long from an articially deflated yen. Let them experience what we consumers have. Oh yes, a high yen might boost domestic demand. it didnt boost demand back in 2009~2012 when the exporters were hurting bad, what people still fail to understand is less exports mean more jobs going overseas which means less tax revenue, which means higher taxes for the smaller workforce to pay the governments bills.

-2 ( +1 / -3 )

@wtfjapan

which means higher taxes for the smaller workforce to pay the governments bills.

Honest question: If you are suggesting that the government should be allowed (or even encouraged) to order the central bank to intervene in the currency markets when it's in the national interest, why shouldn't the government be allowed to order the central bank to simply print and hand over enough money to match the budget every year? Presumably paying the bills is just as important?

The way I see it is either you have an independent central bank or you don't. It seems rather odd to argue that we must abandon central bank independence when it comes to currency intervention because otherwise we won't be able to raise the tax revenue which central bank independence prevents us from simply printing ourselves in the first place. A bit of a circular argument.

1 ( +1 / -0 )

For sure no one intervenes when things go on his favor.Japan main and basic source of income is export,this is well known,so we can imagine how catastrophic it is,when Yen goes up to 106 let alone hurry on down more,106.63 definitely is very crucial-already broken down this week-because it means yen is going to 100 against dollar more fast than bullet train!!Why should Abe and BOJ intervene?simply because whats going on,is mere speculations,has nothing to do with economy.If its really has something to do with economy,yen should be now no less than 125 against dollar in such troubled situation.For sure this is not whats going on,but the opposite.Its so clear.Why not BOJ intervene?what against?what other options in such a catastrophic situation?all suggestions,ideas,and opinion wont be an alternative to export sector as a main source of Japan economy.Yes it makes sense somehow,but never enough or an alternative. Do not blame Abe,LDP,or BOJ, unless you are in their situation,because its always easy to talk.

-4 ( +0 / -4 )

wtfjapan, so I gather you like Japan having a trade surplus. That's ok but don't you think having a lower trade surplus or negative balance even like after the earthquake disaster would alleviate the upwards pressure that a surplus asserts on the currency? Japan can't have an infinitely big trade balance surplus without commensurate upwards pressure on the yen.

And how about overseas investments? Should Japan abandon it's current account surplus and bring all the money back to invest in Japan instead of overseas?

1 ( +2 / -1 )

ghoneim mohamedy.

Abe and BOJ intervene?simply because whats going on,is mere speculations,has nothing to do with economy.

It has nothing to with speculators and everything to do with Japan's current account surpluses. The weakness of the Yen was due to speculators. Those speculators being the BOJ and the Japanese government. A speculation that has gone dreadfully wrong.

ghoneim mohamedy.

yen should be now no less than 125 against dollar in such troubled situation

There is no economic or fiscal logic behind such a statement

ghoneim mohamedy.

Do not blame Abe,LDP,or BOJ, unless you are in their situation,because its always easy to talk.

Do blame Abe and the LDP because Japan's central problem is that the governemt has and is spending too much money

1 ( +2 / -1 )

I want my 360 yen to dollar back like 1966. Yahooo!! rick-san

-1 ( +0 / -1 )

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