TOKYO: Japan’s top currency diplomat Masato Kanda said a weak yen brings both merits and demerits to the economy due to the country’s changing export patterns and increasing reliance on imports.
The boost a weak yen gives to Japan’s export volumes has declined compared with the past, as manufacturers target shipments to high-end, state-of-the-art products overseas rather than compete with price cuts, said Kanda, the country’s vice finance minister for international affairs.
A weak yen, however, still inflates the yen-denominated profits Japanese companies earn overseas, he said.
“The demerits of a weak yen is that it pushes up the import cost of energy and food, thereby increasing household burdens,” he said, acknowledging growing domestic concerns about the potential side-effects of a weak currency.
Kanda’s remarks underscore how a weak yen is becoming a tricky political issue for Japan’s finance ministry, which has historically focused on preventing a strong currency from hurting the country’s export sector.
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