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Weaker Japanese yen to hurt Taiwan in long run: analysts

Weaker Japanese yen to hurt Taiwan in long run: analysts

Taipei, Dec. 31 (CNA) The Japanese yen's depreciation against other currencies might pull jobs back to Japan in the long run and could adversely hurt Taiwan's role as Japan's gateway to the Chinese market, analysts said Monday. Liang Kuo-yuan, president of the Taipei-based Polaris Research Institute, said that according to market estimates, when the U.S. dollar trades above 90 yen for a long period, overseas Japanese businesses are inclined to return home due to lower capital costs, hurting Taiwan's chances of further cooperating with Japan. The U.S. dollar traded above 86 yen Monday due to Japanese Prime Minister Shinzo Abe's policy of reducing the strength of the Japanese currency.
But Liang also noted that the depreciation period needs to last for long before it will lure overseas Japanese businesses back home, or they will simply stay put, even when the U.S. dollar trades above 100 yen. Gordon Sun, director of the Taiwan Institute of Economic Research (TIER)'s Macroeconomic Forecasting Center, said the effects of a weakening yen differ between industries. For example, Taiwan's petrochemical, rubber, metal and mechanical industries might be adversely affected by the weakening yen due to heightened competition from Japan.
The electronics parts sector will see little change thanks to the frequent interaction between the two markets, but Taiwan's auto industry, which relies heavily on imports of Japanese cars, will benefit from the weaker yen, he said. (By Lin Hui-chun and Ann Chen)


Updated : 2021-04-10 20:46 GMT+08:00