Japan premier warns of negative impact on companies from weak yen

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FILE PHOTO: Japan’s new Prime Minister Fumio Kishida delivers his first policy speech at parliament on October 8, 2021 in Tokyo, Japan. Businesshala / Kim Kyung-hoon
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TOKYO (Businesshala) – Japanese Prime Minister Fumio Kishida said on Tuesday that the government would examine the impact on the economy of any further fall in the yen, which risks hurting corporate profits.

Japan’s wholesale inflation rose to a 13-year high in September as rising global commodity prices and a weaker yen pushed up input costs, adding more stress to firms already hit by a supply crunch and for the economy. The approach was clouded.

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“If the yen weakens further, it will boost exports. On the other hand, this will increase costs for companies through higher import costs,” Kishida told parliament.

“We will look closely at the impact of currency moves on companies,” he said, when an opposition lawmaker asked how the government would respond to the yen’s extreme fall.

He said the government will help small and medium-sized firms deal with cost escalation through financial assistance and steps to increase their productivity.

Japanese policymakers have welcomed the historically weak yen as it makes the goods of an export-dependent economy more competitive overseas.

But domestic firms are also vulnerable to rising costs from the weaker yen, given the country’s heavy reliance on imports of fuel, raw materials and food.

Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Andrew Havens and Jacqueline Wong

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