Upper house

Nearly half of Japanese companies see weak yen as bad for business – survey

Illustrative image shows Japanese 10,000 yen banknotes spread out at a World Currency Shop desk in Tokyo in this August 9, 2010 illustrative image. REUTERS/Yuriko Nakao/File Photo/File Photo archive/archive photo

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TOKYO, June 14 (Reuters) – Nearly half of Japanese businesses consider the weak yen to be bad for their business, a private survey released on Tuesday showed, suggesting the currency’s recent sharp drop is hurting business confidence and darkens the economic outlook.

The yen’s drop to a 24-year low against the dollar is inflating the cost of commodity imports, hurting retailers and households and creating a headache for politicians facing an upper house election later this month. next.

When asked how the drop in the yen to around 130 to the dollar affected their business, 46.7% of companies surveyed said the impact was negative, according to the Tokyo Shoko Research survey.

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About 21.7% said the weak yen had both positive and negative effects, while 28.5% said it had no impact. Only 3% said the falling yen was good for their business.

Among small businesses, the ratio of those who felt that the weak yen was negative for their business was 48.2%.

The yen stood at 134.55 to the dollar on Tuesday, after hitting a 24-year low of 135.22 on Monday. It has fallen 14% against the dollar this year.

The survey questionnaire was sent from June 1 to 9 to 5,667 companies; 2,649 responded.

Japanese policymakers multiplied verbal warnings against sharp declines in the yen, but their remarks had little effect in slowing the currency’s slide.

Many market participants expect the yen to decline further as investors focus on the policy divergence between the Bank of Japan, which has pledged to keep interest rates ultra-low, and its US counterpart, which is planning aggressive rate hikes.

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Reporting by Leika Kihara; Editing by Bradley Perrett

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