ID :
198265
Sat, 07/30/2011 - 19:26
Auther :
Shortlink :
https://oananews.org//node/198265
The shortlink copeid
Japan firms face risk of missing earning targets due to strong yen+
TOKYO, July 31 Kyodo -
Japanese manufacturers are under heavy pressure from the strong yen, with the dollar falling to the 76 yen range, well below the 82-83 yen range most Japanese manufacturers assumed in compiling their business forecasts for the current year, economists warned Saturday.
''The yen at the current high level will push down the earnings of Japanese manufacturers considerably in the latter half of the fiscal year,'' said Yoshikiyo Shimamine, chief economist at Dai-ichi Life Research Institute. ''In the long-run, it will also accelerate the shifting of production bases overseas'' by Japanese manufacturers.
Amid uncertainties over the U.S. economy and fears of a possible downgrading of the U.S. credit rating, the dollar dropped as low as 76.72 yen Friday in New York trading, nearing its postwar record low of 76.25 yen registered on March 17.
''Can anyone tell me if there's any company which can compete well with (foreign rivals) with the foreign exchange level of 77 yen,'' said Kiyoshi Ozaki, vice president of Mazda Motor Corp.
According to the Bank of Japan's Tankan business survey in June, Japanese major manufacturers on average set the yen's value at 82.59 yen to the dollar in compiling their business forecasts for this year.
Toyota Motor Corp., for example, set its business plan at 82 yen. A rise of one yen slashes 30 billion yen from its operating profit.
An official at Fujifilm Holdings Corp. said, ''We want the government to do various things it can do'' to stem the rise of the yen, suggesting yen-selling intervention by the government through the Bank of Japan.
But Japan's monetary authorities have so far not moved to intervene in currency trading, although Finance Minister Yoshihiko Noda has kept saying they are ''monitoring the market closely.''
The Japanese economy has recently been on a recovery course, as nationwide supply chains have gradually been restored after being disrupted by the March 11 earthquake and tsunami. But the pace of recovery has not been strong, and threatened by power shortages due to the crisis at the Fukushima Daiichi nuclear plant.
Against that background, the strong yen is expected to deal a considerable blow to the Japanese economy, analysts said.
Some analysts say the dollar's weakness stems largely from angst over the 11th hour theatrics in Congress over raising the U.S. debt ceiling, and once it is raised, the dollar will rebound.
But Takahide Kiuchi, chief economist at Nomura Securities Co.'s financial and economic research institute, disagrees with that view.
''The U.S. economy has slowed down and the current trend may not reverse its course easily.''
Japanese manufacturers are under heavy pressure from the strong yen, with the dollar falling to the 76 yen range, well below the 82-83 yen range most Japanese manufacturers assumed in compiling their business forecasts for the current year, economists warned Saturday.
''The yen at the current high level will push down the earnings of Japanese manufacturers considerably in the latter half of the fiscal year,'' said Yoshikiyo Shimamine, chief economist at Dai-ichi Life Research Institute. ''In the long-run, it will also accelerate the shifting of production bases overseas'' by Japanese manufacturers.
Amid uncertainties over the U.S. economy and fears of a possible downgrading of the U.S. credit rating, the dollar dropped as low as 76.72 yen Friday in New York trading, nearing its postwar record low of 76.25 yen registered on March 17.
''Can anyone tell me if there's any company which can compete well with (foreign rivals) with the foreign exchange level of 77 yen,'' said Kiyoshi Ozaki, vice president of Mazda Motor Corp.
According to the Bank of Japan's Tankan business survey in June, Japanese major manufacturers on average set the yen's value at 82.59 yen to the dollar in compiling their business forecasts for this year.
Toyota Motor Corp., for example, set its business plan at 82 yen. A rise of one yen slashes 30 billion yen from its operating profit.
An official at Fujifilm Holdings Corp. said, ''We want the government to do various things it can do'' to stem the rise of the yen, suggesting yen-selling intervention by the government through the Bank of Japan.
But Japan's monetary authorities have so far not moved to intervene in currency trading, although Finance Minister Yoshihiko Noda has kept saying they are ''monitoring the market closely.''
The Japanese economy has recently been on a recovery course, as nationwide supply chains have gradually been restored after being disrupted by the March 11 earthquake and tsunami. But the pace of recovery has not been strong, and threatened by power shortages due to the crisis at the Fukushima Daiichi nuclear plant.
Against that background, the strong yen is expected to deal a considerable blow to the Japanese economy, analysts said.
Some analysts say the dollar's weakness stems largely from angst over the 11th hour theatrics in Congress over raising the U.S. debt ceiling, and once it is raised, the dollar will rebound.
But Takahide Kiuchi, chief economist at Nomura Securities Co.'s financial and economic research institute, disagrees with that view.
''The U.S. economy has slowed down and the current trend may not reverse its course easily.''
