Japanese industry shrugs off yen's strength

THERE WERE new signs of recovery in Japanese industry, with official figures yesterday showing a sharp surge in output in November. Manufacturers seemed to have shrugged off the burden of the strong yen, with production up 3.8 per cent during the month. Construction orders also surged in November.

In its annual report, the Economic Planning Agency said the strong currency is unlikely to be as big a burden on Japanese companies as in the past. It said corporations have learned to cope, and that the high exchange rate would speed up corporate restructuring and boost profits.

"There are negative effects of the higher yen in the short term, but we also see positive factors in the longer term," said an agency official.

However, officials indicated that further intervention on the foreign exchanges to hold down the yen was likely, if the currency moved too fast. This followed Friday's intervention by the Bank of Japan to buy dollars for yen.

Masaru Hayami, the Governor of the Bank of Japan, said the strength of the yen reflected growing overseas confidence in the Japanese economy. But Nobuaki Usui, the vice-finance minister, said decisive steps would be taken in the currency markets if necessary.

The yen fell slightly against the dollar yesterday to 102.60 from below 102 on Friday. It has climbed from around 125 in May.

The EPA report added that recovery in South-east Asian economies was also helping Japanese exporters.

As if to emphasise the point, yesterday the Bank of Korea published a revised new forecast for the economy's growth in 2000, now expected to be 7.2 per cent rather than 6.4 per cent. This will follow a bounce in GDP of more than 10 per cent this year, after 1998's financial and economic crisis. South Korean shares soared yesterday.

The recovery in Asia is helping boost Japan's exports, with higher industrial production making up for weak consumer demand. The EPA report predicted Japan's GDP would rise by 1 per cent in the fiscal year starting next April, compared with likely growth of 0.6 per cent in the current year.

These predictions are in line with most outside forecasts for the economy, which have become steadily more optimistic over the course of the past year. But to make sure the recovery stays on track, Japan's cabinet on Friday approved the country's biggest ever budget for the year starting in April.

Yesterday's figures showed a 3.8 per cent month-on-month increase in industrial output and a rise of 8.1 per cent in construction orders in November. However, retail sales in November were 2.8 per cent down year- on-year, the 19th consecutive month of decline.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness