Nearly half of Japan firms see weak yen as bad for business – survey

TOKYO (Reuters) – Almost half of Japanese firms see the weak yen as dangerous for his or her enterprise, a personal survey confirmed on Tuesday, suggesting the foreign money’s current sharp decline is hurting enterprise sentiment and clouding the financial outlook.

The yen’s decline to a 24-year low in opposition to the greenback is inflating the price of uncooked materials imports, hurting retailers and households and making a headache for politicians dealing with an higher home election subsequent month.

When requested how the yen’s decline to round 130 per greenback was affecting their enterprise, 46.7% of firms polled stated the impression was unfavourable, the survey by Tokyo Shoko Analysis confirmed.

About 21.7% stated the weak yen had each constructive and unfavourable results, whereas 28.5% stated it had no impression. Simply 3% stated the yen’s fall was good for his or her enterprise.

Amongst smaller firms, the ratio of those that felt the weak yen was unfavourable for his or her enterprise was 48.2%.

The yen stood at 134.55 per greenback on Tuesday, after hitting a 24-year low of 135.22 on Monday. It has fallen 14% in opposition to the greenback this yr.

The ballot questionnaire was despatched from June 1 to 9 to five,667 companies; 2,649 replied.

Japanese policymakers have escalated verbal warnings in opposition to sharp falls within the yen, however their remarks have had little impact in slowing the foreign money’s slide.

Many market gamers anticipate the yen’s decline to proceed as buyers deal with coverage divergence between the Financial institution of Japan, which has vowed to maintain rates of interest ultra-low, and its U.S. counterpart, which is planning aggressive charge hikes.

(Reporting by Leika Kihara; Modifying by Bradley Perrett)