TOKYO—The chairman of the Japan Auto Manufacturers Association said Wednesday that he hopes the government will take measures to deal with the strong yen, which he said is hurting Japanese exports and could hamper the country's economic recovery.
"If the yen's strength continues, there will be a negative impact on Japan's economy," said Toshiyuki Shiga during a news conference. "If there are any steps (the government could take), then we would like to ask" for such measures, said the chairman, who is also chief operating officer of Nissan Motor Co.
A strong yen squeezes profits Japanese auto makers earn overseas when translating them into their home currency. It also makes Japan-built vehicles more expensive abroad and so discourages domestic players from shipping them overseas. About half of the vehicles produced in Japan were exported in the last fiscal year ended March, according to JAMA.
This is the latest warning from an auto industry executive regarding the potential damage of the strong yen. The euro plummeted to an eight-and-a-half-year low of 107.30 yen and the dollar sagged to a seven-month low of 86.96 yen last week. Mazda Motor Corp. Chief Financial Officer Kiyoshi Ozaki recently said his company is considering raising vehicle prices and cutting incentives in Europe, and is aiming to sell bigger and more profitable vehicles there to help offset the negative impact of the euro's decline.
The dollar and the euro are currently hovering around 87.40 yen and 110 yen, respectively, weaker than 90 yen and 120 yen to 125 yen at which major Japanese car makers are basing their earnings forecasts for this fiscal year through March.
