By on September 2, 2010

Sometimes, strength is a weakness. Especially in currencies. The still surging Yen makes Japanese Exports expensive and unprofitable. Despite a lot of talk from their elected officials that the Yen is too high, manufacturers are thinking it will go higher. This could significantly alter the export-heavy Japanese industrial landscape. Case in point. Suzuki and a plot of land.

Suzuki had a great idea: They wanted to go into the industrial park business. The plan was to buy 100 acres of land between Suzuki’s Sagara plant and the port of Omaezaki. That port is Suzuki’s major export hub. Space in the industrial park was to be sold or rented out to affiliated parts makers. Everything was supposed to be up and running in 2014. Did we mention before that the biggest beneficiaries of just-in-time development are real estate developers? No profit this time: The project has been scrapped. Suzuki is writing off $3m in surveying costs, and told parts manufacturers to continue making parts wherever they are.

According to the Nikkei, “the yen’s advance played a part in convincing the automaker to give up the project because exports will likely remain weak if the Japanese currency stays strong.”

Currencies work in wondrous ways: The U.S. has pressured China to give up their dollar peg. They did that to some degree. As a result, China doesn’t have to buy boatloads of dollars anymore to maintain the peg. Instead, they are going heavily into the Yen, because the Chinese also think it will go further up. Just by the mere fact of the Chinese buying into the Yen,  the Yen continues to go up. Lower demand for dollars makes the dollar go down. It’s heading south as I type this. This makes US exports cheaper. That creates jobs if the U.S. still has something to export. It also makes imported goods more expensive. Not just Japanese cars. Everything at Walmart. Everything the U.S. imports en masse. This creates inflation: Everybody pays the price to bail out the economy.

PS: If some idiot still mentions that the Yen is being manipulated and way too low, please do me a personal favor: Sock him.  If nobody is watching.

Get the latest TTAC e-Newsletter!

6 Comments on “Get Your Japanese Import Now (While You Can Still Afford It)...”


  • avatar
    grzydj

    “PS: If some idiot still mentions that the Yen is being manipulated and way too low, please do me a personal favor: Sock him. If nobody is watching.”

    Peter DeLorenzo lives somewhere in Detroit. He won’t be watching as he’s too busy writing about the glory days at GM and of course how Japan Inc. manipulates it’s currency to a giant bowl unmitigated bullshit of raison d’etre of not good and as he likes to say around there notgonnahappen.com.

  • avatar
    jmo

    That creates jobs if the U.S. still has something to export.

    Among many other things the US is the Saudi Arabia of food.

    Rank Country Grain Production inc. Wheat Maize Barley

    (million tonnes)

    1. United States 376.6 64.5 295.0 5.1

    2. European Union* 290.6 139.0 58.1 61.5

    3. China 273.5 112.0 152.0 3.7

    4. India 114.3 78.0 18.0 1.3

    5. Russia 85.6 51.5 – 18.0

  • avatar
    obbop

    Maybe the horde of rusty, gate padlocked, weeds growing through the cracked asphalt parking lot, empty for years factories located on the edge of so many medium to small towns across the “Rust Belt” (and other areas) will re-open and built cheap junky wind-up toys for sale to emerging markets across the globe.
     
    To evade carbon footprinting wind-powered ships using sails can ply the seas with USA citizen crews.
    Bright glorious days ahead of us!!!!!!!!!!!!!!!
     
    Sell that Wal-Mart stock now, though.
     
    I doubt if the pay the new class or workers will allow purchasing of much more than a smidgen of calories and families will have to triple or quadruple up in one small abode to afford rental costs.
    But there’s always the American Dream ™ to sustain the partially washed huddled masses.

  • avatar
    ClutchCarGo

    “Lower demand for dollars makes the dollar go down. It’s heading south as I type this. This makes US exports cheaper. That creates jobs if the U.S. still has something to export. It also makes imported goods more expensive.”

    An example of how the economic worm turns:
    http://www.npr.org/templates/story/story.php?storyId=129406588&ps=cprs

    And Walmart is smart enough to find domestically produced products as foreign products get more expensive due to rising labor/shipping costs and currency exchange rates. Yes, there are still domestic manufacturers, and they’re hungry.

  • avatar
    mtypex

    This just in … the yen hit 10 per dollar … but GM said it’s still too low! The damn Japanese are manipulating the FX markets!!!!!!1!!!!11!!!!

  • avatar
    slumba

    Actually I have been considering buying a Ford for precisely that reason.  If the yen continues to get stronger, replacement and service parts will rise significantly in price.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States