Strong Yen has Upside for Japanese
Japanese officials are struggling with the nation's strongest currency in 15 years, but for consumers and some companies there have been benefits.
In 2010, Japanese firms have spent $27 billion snapping up overseas rivals, that's already more than the $21 billion in all of 2009.
Meanwhile, Japanese importers have greater buying power and firms that should consider expanding overseas have more reason to do so, says Societe Generale's Takuji Okubo.
[Takuji Okubo, Chief Economist, Societe Generale Securities]:
"Obviously, importers whose cost is denominated in overseas currencies, they should benefit. Their costs will get cheaper and they don't necessarily have to cut prices, so the good aspect will be higher margins. That's the first beneficiary. But in terms of a much bigger picture, it's the consumers."
For shoppers, long used to 100-yen shops and sushi restaurants, "endaka," as it's known, can mean less expensive goods and services and even more benefits abroad.
International travelers, whose buying power has grown with the strong yen, are up over 10 percent through June, according to government estimates, while Delta Airlines president Edward Bastian says the yen at 84 to the dollar means better financial results for his carrier.
[Edward Bastian, President, Delta Airlines]:
"The strength of the yen has obviously improved the purchasing power of our local Japanese customers, so as a result demand has been strong and a result our load factors have been quite healthy."
Japanese exporters have complained bitterly about the strong yen, which trims profits, but there is an upside to the currency's deflationary impact, says J.P. Morgan's Jesper Koll.
[Jesper Koll, Head of Research, J.P. Morgan]:
"There's a lot of 'yoi defure', or good deflation, that actually raises the purchasing power of Mr. and Mrs. Watanabe. The key question for consumer spending is, however, not just the fact prices keep on falling, so your purchasing power goes up, but what you really do need some confidence that your wages will actually be going up and that your job security is going up."
Falling prices since the mid-1990s have squeezed wages and pushed some jobs offshore, but the unemployment rate fell in July to 5.2 percent, a sign Japanese companies are cautiously increasingly payrolls despite the yen.