Roughly 40 percent of Japanese firms say they would move factories overseas if the yen stays at its current high of around 85 to the dollar, according to an official survey released Friday. The yen has recently traded near a 15-year-high against the dollar, and a nine-year high against the euro, making Japanese exports less competitive overseas and shrinking companies' repatriated earnings.
In the survey of 200 Japanese companies, conducted by the ministry of economy, trade and industry, 61 percent of firms said they would expand overseas production at existing plants if the yen stayed high.
The foreign exchange rate "could accelerate the hollowing out of domestic industries," the ministry said in the survey, carried out from August 11 to 24. Sub-contractors have faced tough pressure to slash costs, while they worry about losing contracts to overseas rivals.
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