Japanese executives are increasingly warning that currency swings and a persistently weak yen pose risks to the economy. Their comments underscore growing unease over the strain a weak yen places on Japan’s import-dependent economy, even among exporters that have enjoyed a boost from a cheaper yen in global markets.
Impact on Economy
In July, the yen hit a 40-year low at nearly 164 to the dollar, prompting a joint Japan-U.S. currency intervention that lifted the yen by around 5%. Higher costs for energy, materials, and food weigh on domestic demand, threatening Japan’s gradual emergence from decades of deflation.
Sharp currency moves also upend earnings forecasts and complicate investment decisions for companies with global operations, even if a weaker yen ultimately lifts their bottom line. A JETRO survey published in March found a rate of 120-124 yen to the dollar was the most desirable exchange rate range, selected by nearly a fifth of companies.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
