Reposted from the Steel Business Briefing via the American Iron and Steel Institute’s Daily Business Briefing

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Japanese Industry Groups Press For Weaker Yen

Steel Business Briefing  |  February 27, 2012

To the relief of Japanese exporters their currency the yen has been weakening of late. Nevertheless, a grouping representing manufacturers including the Japan Iron & Steel Federation (JISF) is to submit a formal request to the Japanese government and ruling Democratic Party soon seeking their help to “correct” the yen’s appreciation against the dollar.

Submitting the joint request will be the JISF, The Shipbuilders’ Association of Japan (SAJ), Japan Mining Industry Association and Japan Federation of Basic Industry Workers’ Unions, Steel Business Briefing understands. “The yen has been weakening but it is still too high (so) we need the government to make efforts to correct it (and) support Japanese manufacturers,” a JISF spokesman said. A SAJ spokesman explains that small changes in the yen’s exchange rate have a major impact and that the strong currency has forced Japanese shipbuilders to decline orders.

This in turn has reduced the volume of steel and other materials builders consume. “The strong yen produces a spiral of negative effects for manufacturers (and) it needs to be corrected as early as possible,” the spokesman said. Should the yen continue to strengthen, Japanese companies will have to shift production abroad, he warned. Though the JISF has yet to determine an “adequate” level for the yen-dollar exchange, Eiji Hayashida, JISF chairman and JFE Steel president, said on 22 February that he personally believed ¥90=$1 should be appropriate considering Japan’s current economy.

SAJ chairman Kazuaki Kama, who also heads heavy industry giant IHI Corporation, said his company also believes ¥90=$1 to be adequate. The yen-dollar exchange rate as of Friday was around ¥80=$1, down by over ¥3 from early February, SBB notes.