The survey underscores how yen weakness is now a bigger earnings concern for many Japanese firms than the BOJ’s tightening path itself, with more than half viewing the currency’s slide as a net negative despite the usual boost it gives exporters.
That’s a notable shift given the yen’s historical role as a tailwind for Japan Inc, and points to rising import cost pressure, particularly with energy prices elevated due to the Middle East conflict
With companies split on where they’d like to see dollar/yen settle, and the BOJ’s next meeting on July 30-31, currency policy and rate guidance are likely to stay in focus for corporate Japan in the near term. — More than half of Japanese firms say the weak yen is hurting earnings, even as the currency’s slide to a 40-year low continues to test the BOJ’s resolve. Summary: Over half of Japanese firms surveyed said the weak yen is negative for earnings, versus about a third who see it as positive The yen slumped to a 40-year low of about 162.84 per dollar earlier this month, despite a record 11.7 trillion yen intervention by the government in spring Rising import costs, including for energy amid the Middle East conflict, are weighing on firms reliant on imported materials, even as a weaker yen boosts exporters’ overseas earnings On preferred dollar/yen levels, most respondents favoured a range of 140 to 159.99 yen, with almost none comfortable above 160 Nearly half of firms also reported adverse effects from BOJ rate hikes, with the policy rate now at a 31-year high of 1.0% Views were split on the best timing for the BOJ’s next hike, with the largest shares favouring later this year or the first half of 2027, though about a quarter said no hike would be desirable at any point More than half of Japanese firms say the weak yen is hurting their earnings, even as the currency continues to trade near multi-decade lows against the US dollar, according to a Reuters survey. The poll, conducted by Nikkei Research, found 55% of