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Yen Rises, the Japanese React

September 28, 2009

Some of the biggest economic news in Japan, besides the stock and job markets, is always the exchange rate. When the yen gets stronger against the dollar, big Japanese exporters always worry. Their prices become relatively more expensive in other countries, and with that comes a drop in sales.

The newspapers this morning each reported on the reaction to the increase in the yen to 88 yen per dollar. The Asahi focused on this as a headline in their newspaper, where as the Nikkei and Yomiuri decided to list it as second page news.

Asahi It Went Up! Cried Farmers and Factory Workers Alike The Yen, on the morning of the 28th rose to 88 yen per dollar. According to the Asahi this means that prices for agricultural imports will drop, however companies involved with exports are feeling uneasy.

A small nail manufacturer that’s producing goods for China commented: “Every one cent the yen increases we lose 40,000 dollars worth of profits. That’s the equivalent of paying one more person’s salary.” The head of a factory in Tokyo said “It went up!” He had been hoping that the yen would not increase to the 80 level again.

The Asahi mentions towards the end of their article how import prices are also decreasing, and the positive impact that may have for some consumers. This shows that their main reading (and probably advertising) base could be manufacturers, and other companies who are affected negatively by the increase in the yen.

Nikkei The Japan Business Federation Chairman: Company’s profits will not really change” The Nikkei had an entirely different article and take on the increase in the yen. The all powerful Japan Business Federation chairman stated that “it depends on the industry as to whether this has really affected them or not. I would say as of right now, however, company profits have really seen too much change.”

On the other hand, the Nikkei did report that the chairman wishes that all industries stabilize and are feeling comfortable with the economic environment.

Yomiuri The Yen Rises, the Stock Market Breaks 10,000 The Yomiuri, instead of focusing on the impact on industry, talked about the market as a whole. The perception in the market that the Fed will continue to keep interest rates low for the dollar caused investors to sell dollars and buy yen, according to the Yomiuri. The Yomiuri also reported that the finance minster of Japan stated “I am not pursing a weak yen policy,” to quell fears that the Japanese authorities might react to this recent yen strengthening.

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