Japanese Executives Say Excessively Weak Yen Is Not Good News After It Hits 164 Yen per Dollar, Driving Up Import Costs

Money & Banking··JPUS·Read original
3▲0 ▼1Impact / 5
Summary · why it matters

Japan's business sector is calling for greater stability in the foreign exchange market after the yen weakened to nearly 164 yen per dollar, its lowest level in 40 years, and one of the factors that led Japan and the United States to jointly intervene in the currency market last week to support the yen. The intervention resulted in the yen strengthening back by about 5 percent. Senior executives from several Japanese companies, such as Kenichiro Fujimoto, CFO of Mitsubishi Electric, pointed out that a weak yen does not mean everything is always good. While it helps boost overseas revenue and the export sector, rising costs for energy, raw materials, and food are starting to pressure the economy. Meanwhile, Norihiko Ishiguro, Chairman of JETRO, said that Japanese companies must import almost all raw materials. When the yen weakens to a certain level, the increased costs may outweigh the benefits. Makoto Tanaka, CFO of Mitsui & Co, and Yoshihiro Shimazu, CFO of Mitsubishi Corp, both emphasized the need for market stability and reduced volatility, as severe fluctuations make business planning more difficult. A JETRO survey also found that the most desired exchange rate level for Japanese companies is 120 to 124 yen per dollar, with only 11 percent wanting to see the yen weaker than 150 yen per dollar, reflecting that an excessively weak yen is not a situation most of the business sector wants.

Impact on assets 4

Energy Transition & Power Demand▲ · 2 stocks
Mitsui & Co.,Ltd
8031
± Mixedrelevance

CFO emphasizes need for market stability; impact mixed as weak yen boosts overseas revenue but raises import costs.

Mitsubishi Corporation
8058
± Mixedrelevance

CFO calls for reduced volatility; weak yen has both positive and negative effects on business.

Robotics & Physical AI▲ · 1 stocks
Others▼ · 1 stocks
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