TOKYO: The yen’s drop past 150 per dollar to levels unseen in 32 years is expected to put heavier burdens on businesses and households in Japan.

A weaker yen has long been seen as a positive factor as it pushes up revenues at export-oriented companies, such as manufacturers.

But the yen’s downward trend since early this year has led to higher import costs, a spate of price hikes for food and other products and a decline in consumer spending.

“There are almost no companies even in the manufacturing sector that see benefits from the yen’s weakening,” Tadashi Yanai, president of Fast Retailing Co., the operator of Uniqlo and other casual clothing stores, told a press conference Oct. 13.

“There’s rather a disadvantage,” Yanai added, emphasizing the negative impact of the yen’s depreciation on the Japanese economy as a whole, even on export-oriented companies.

An official in the electronics industry, a typical export-oriented sector, said that the rapid weakening of the yen has pushed up production costs, offsetting rises in revenues.

It is difficult to fully enjoy the benefit of the yen’s drop because “we make and sell many products outside Japan,” an official of a major electronics company said.

Food producers, which have already raised product prices due to higher raw materials costs, face a heavier blow.

“It’s difficult to cover higher procurement costs caused by the yen’s rapid weakening solely through corporate efforts,” an official at a major food producer said.

“We already have a hard time dealing with higher raw materials and energy prices,” an official at a major restaurant operator said.

“The situation will become even tougher due to the yen’s depreciation,” the official said, adding that there are limits to what the company can do through internal efforts.

Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, told a press conference Thursday that “a weaker yen is not favorable for the current Japanese economy.”

Regarding the Bank of Japan’s massive monetary easing policy, which is behind the yen’s slump, Yoshinori Isozaki, president of beverage group Kirin Holdings Co., said that now may be the time to review the policy.

Meanwhile, the yen’s further fall gives a boost to inbound tourism-related businesses that have already been gaining momentum thanks to Japan’s drastic easing of its COVID-19 border control measures.

“The current low levels of the yen are very attractive to foreigners and prompt them to visit Japan,” said Koji Shibata, president of airline group ANA Holdings Inc..

 While the department store industry is widely considered to benefit from a recovery in inbound tourism, an official at a department store operator voiced concerns, saying that foreign shoppers are not the company’s main source of revenue.

“If the yen’s downturn continues and the wave of price hikes spreads to clothing and general merchandise, that would affect (spending by) many middle-income earners,” the official warned.

JIJI Press