Japanese industry shrugs off yen's strength
Tuesday 28 December 1999
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.
Kirstie Allsopp has waded into the female fertility debate again
...and it wasn't caused by an asteroid crash, as first thought
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered...
- 3 35,000 walrus gather on north-west Alaska beach 'for a rest'
- 4 Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Stella McCartney apologises over controversial 'very ill' model picture on Instagram
Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
Prince held a Facebook Q&A and this is the only question he answered...
Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Cheryl Cole named 'the most dangerous celebrity' on the internet
Former Tory donor Arron Banks ups his Ukip donation to £1million following William Hague 'nobody' comment
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...