yen plunge hurting but more still to come
Last Updated : GMT 00:49:26
Arab Today, arab today
Arab Today, arab today

Yen plunge hurting, but more still to come

Arab Today, arab today

Arab Today, arab today Yen plunge hurting, but more still to come

Three years after hitting 75 yen to the dollar
Tokyo - AFP

The precipitous plunge in the value of the yen in the past 18 months is an object lesson in being careful what you wish for.
After years of complaints by economic managers that the yen was too high and no one was buying Japanese exports, the currency is on a one-way charge to the bottom of the heap.
Three years after hitting the dizzy heights of 75 yen to the dollar as global investors poured into the safe haven currency, the Japanese unit is now plumbing seven-year lows beyond 120 to the dollar.
Massive -- and recently expanded -- monetary easing by the Bank of Japan has been responsible for driving down the yen, a trend that has accelerated in recent months as the Fed wound down its asset-purchase programme.
The price of Japanese goods abroad has fallen and exporting firms have seen their bottom line fattening nicely, driving up share prices.
Companies such as Toyota and Panasonic have celebrated as their coffers fill with cash, enough -- maybe -- to dish out the pay rises Prime Minister Shinzo Abe desperately wants workers to get if they are ever to start spending and help nurture the economy back to health.
With the dollar at 120 yen, compared with 103 a year ago, the main six automakers stand to collectively enjoy an additional 800 billion yen ($6.7 billion) in operating profit for the year to March 2015, the Nikkei newspaper estimated.
And businesses catering to foreign tourists are seeing a boom, with the cheap yen encouraging an ever-greater number of high-spending foreigners to splash the cash.
- Corporate bankruptcies -
But the rocketing price of imports such as energy, food and raw materials have put the squeeze on consumers and businesses at home.
Where Tokyo was accustomed to making soothing noises to hard-hit exporters, it now finds itself drafting measures to combat high fuel prices that have hit truck drivers and fishermen.
The number of yen-linked corporate bankruptcies nearly tripled to 301 in the 11 months through November, according to Teikoku Databank, a corporate credit research firm.
"Further yen depreciation could do lethal damage to mid-sized and small companies which are barely surviving," the report warned.
Among those that have succumbed is now-bankrupt bag maker Fukai, among a number of firms that struggled to pass on the extra costs to customers, which came as the sales tax rose from 5.0 percent to 8.0 percent in April, hammering consumer spending.
"In addition to losses in currency derivatives due to past strengthening of the yen... increased costs in imports due to a cheaper yen since the end of 2012 worsened its profitability rapidly," the Teikoku report said of the bag maker.
For struggling companies and hard-pressed consumers, it seems worse is yet to come.
Abe's Liberal Democratic Party is widely expected to bag an easy victory in this weekend's general election, meaning more of the same.
The US economic recovery should also fuel dollar-buying, economists said.
There is one factor cushioning Japan from the full brunt of the plunging yen -- cheap oil.
Crude has struck fresh five-year lows, with US benchmark West Texas Intermediate for January delivery around $63 a barrel and analysts forecasting further falls owing to weak demand, a global supply glut and fewer production halts.
Even with its ever-larger need to import dollar-denominated fossil fuels -- a legacy of the nuclear shutdown in post-Fukushima Japan -- things are not as bad as they could be.
The impact of cheap oil on the economy at large is similar to a tax cut in Japan for now, said Ryutaro Kono, economist at BNP Paribas.
But -- frustratingly for Abe -- that is taking the wind out of price rises and putting his target of 2.0 percent inflation further beyond reach.
That, in turn, might lead the Bank of Japan to further extend its easing programme, which could further drive down the yen, Kono added.
If that happens "we will never enjoy the benefits of falling oil prices", said Kono.

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

yen plunge hurting but more still to come yen plunge hurting but more still to come

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

yen plunge hurting but more still to come yen plunge hurting but more still to come

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Air China suspends flights to North Korea

GMT 10:39 2017 Thursday ,23 November

Air China suspends flights to North Korea
Arab Today, arab today Sophian Yussef reveals suitable decoration

GMT 02:56 2017 Thursday ,23 November

Sophian Yussef reveals suitable decoration
Arab Today, arab today Syria opposition meets in Riyadh

GMT 06:23 2017 Thursday ,23 November

Syria opposition meets in Riyadh
Arab Today, arab today Jordanian journalist happy of her career

GMT 17:37 2017 Thursday ,23 November

Jordanian journalist happy of her career
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Human form of 'mad cow' disease

GMT 00:11 2017 Friday ,24 November

Human form of 'mad cow' disease
Arab Today, arab today Srebrenica women cry tears of joy

GMT 08:03 2017 Thursday ,23 November

Srebrenica women cry tears of joy
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today 'Robo-taxis' hold promise, and perils

GMT 08:07 2017 Thursday ,23 November

'Robo-taxis' hold promise, and perils
Arab Today, arab today Honda recalls 800,000 minivans

GMT 11:43 2017 Wednesday ,22 November

Honda recalls 800,000 minivans
Arab Today, arab today Abeer Sabry reveals reason of “The Flood” success

GMT 08:03 2017 Tuesday ,21 November

Abeer Sabry reveals reason of “The Flood” success
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 07:56 2017 Monday ,20 November

Singer Jahda Wahba has unlimited ambitions

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts

GMT 10:43 2017 Wednesday ,22 November

Cigar-shaped asteroid came

GMT 09:45 2017 Tuesday ,21 November

Visit Jamaica for more than just sun

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday