Yen’s rapid fall not seen as positive for economy by Japan’s major firms

None of Japan’s major companies see the yen’s recent rapid fall as positive for the domestic economy, even as the currency’s weakening typically benefits its export-oriented economic structure, a survey showed Monday.

In a Kyodo News survey covering 125 companies, of which 109 such as Toyota Motor Corp. and Softbank Group Corp. gave valid answers, 31% said the yen’s recent slide was negative and 36% said it was neither positive nor negative.

The Japanese currency has lost around ¥15, or 12%, against the U.S. dollar since early March to hit 20-year lows. A weaker yen boosts profits earned overseas when translated back into yen and makes Japan-made products more price competitive abroad.

Bank of Japan Gov. Haruhiko Kuroda maintains his view that the positive effect of a weak yen outweighs the negatives for the world’s third-largest economy. The central bank continues its easy monetary policy to achieve its 2% inflation goal, a move that could weaken the yen further.

But the yen’s drop only adds to worries that it could pressure businesses and households in resource-poor Japan through higher import costs for energy and other commodities.

The poll found 37% said the yen’s current sharp fall will have a positive impact on their earnings due to the benefits for their businesses outside Japan, outstripping 26% that said it will have a negative impact because of higher raw material and energy costs. Some 28% said they have seen neither a positive nor a negative impact.

In a question about a desirable exchange range for the yen against the dollar, about half of the respondents chose a zone between ¥110 and ¥115, compared with the current levels around ¥130.

The survey was conducted between April 18 and Thursday, when the yen was trading near ¥130.

The respondents also included ANA Holdings Inc., East Japan Railway Co., and Suntory Holdings Ltd.