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Tumbling Yen Highlights Japan Business News - 2001-12-28

In this week's Japan business headlines, the big story is the yen's tumble and the impact that is having on the nation's industries.

The dollar's climb to above 130 yen is seen as good news for Japan's exporters, such as automakers and manufacturers of electric appliances. An official at appliance-maker Hitachi called the weak yen good for his company's earnings.

But the president of Japan's largest automobile company, Toyota, has reservations about the currency's declining value. Fujio Cho told reporters this week that most of the cars Toyota sells in big overseas markets, such as the United States, are now made overseas. Speaking to TV Tokyo, Cho elaborated on his worries about the yen. "I am concerned, because the exchange rate has an impact in various areas. The Japanese auto industry has said that an exchange in the range of 110-to-120-to-the-dollar best reflects present conditions. I still think the exchange rate should be at that level," he said.

Fast-food giant McDonald's Japan says it is hurt by the falling yen. A company official says McDonald's imports a lot of its raw materials, thus the weak yen will cut its earnings.

Japanese banks continue to struggle with hefty bad loans. Ishikawa Bank, a regional second-tier financial institution, went under this week. It holds deposits worth $3.7 billion . The Bank of Japan is expected to extend financial support, and the Financial Services Agency will send administrators to the bank.

One of the country's largest machinery makers has announced it will cut its domestic work force by more than 10 percent over the next four years. Mitsubishi Heavy Industries will slash 4,000 jobs. It blames weak worldwide demand for aircraft and gas-powered turbines for the job losses.

Despite the economic downturn, more and more people in Japan sign up for cell-phone service. NTT DoCoMo, Japan's top mobile phone operator, says it now has 30-million subscribers using its Web-capable handsets. That far surpasses the company's initial goal of 10-million customers in the first three years after the launch of its i-Mode service.