Yen’s decline boosts shares but worries exporters

TOKYO — The yen has resumed its downward trajectory against the dollar, and some Japanese exporters, which would normally welcome such movement in their home currency, are now beginning to worry that it will hurt them instead via higher costs of imported materials.

The yen declined by more than 1 to the dollar at one point Monday, touching 121.78 per dollar, near the 122.04 figure reached in March.

But many exporters now worry about excessive weakening of the yen. For fiscal 2015, the average forex assumption among 350 major Japanese companies that close their books in March, including automakers, is a little below 117 yen per dollar.

“Too weak a yen is a negative because it pushes up materials costs,” said Shigeru Murayama, Kawasaki Heavy Industries president. The company’s operating profit rises 2 billion yen for each 1-yen-to-the-dollar decline. But the weaker yen hampers cost-cutting at its aerospace and other businesses.

Even automakers share the concern. In times when the yen has strengthened, many carmakers increased parts imports from Thailand, China and other parts of Asia. But with the yen declining against the greenback, “the Chinese yuan and Thai baht also strengthen [against the yen], pushing up parts costs,” a Mazda official said.

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