Posts Tagged ‘high yen’

Are consumers being short-changed by the yen’s appreciation?

Thursday, October 20th, 2011

"Endaka" sale: Limited time only?

An ongoing matter of concern in the Japanese financial pages is the continued appreciation of the yen against almost every other currency. According to the overriding narrative attendant to this concern, Japanese exporters “enjoyed” a lower yen (en-yasu) until the middle of 2007, meaning that because the yen was valued low in relation to the currencies in the countries where these companies’ goods were sold, they made more money. That changed, and especially after the financial crisis of 2008, the yen shot up and continued to rise over the next three years, even after Japan’s economy was pummeled by the earthquake and tsunami last March. The yen is now up about 25 percent over what it was four years ago.

This is generally considered a bad thing since Japan’s economy depends on exports, but a lot of economists are saying the situation isn’t as dire as the media has portrayed it. Major exporters like Toyota and Sony have the ear of the mass media, so their troubles tend to represent all of Japanese industry in the financial press, but exports account for less than 20 percent of Japan’s economy. These companies threaten to move operations overseas if the yen isn’t brought down, but they’ve already moved a huge portion of their manufacturing overseas. In addition, they buy parts and materials from countries where their yen goes much further.

The economists who point this out also explain that the high yen can be considered a good thing for consumers, who should expect to “enjoy” substantially lower prices for imported products and Japanese products that use foreign ingredients. That should go without saying, and we’ve been waiting to see these savings at our local retailers. We’re still waiting. When we ask why the high yen isn’t reflected in prices we get answers like this: Though the yen is appreciating, commodity prices are increasing; many countries are experiencing inflation; since all imports have to be shipped, prices depend on the price of oil. In the end, these answers sound like excuses, because except for some isolated retail areas (Amazon; one particular brand of imported camembert, pictured), almost nothing sold in Japan from overseas has become noticeably cheaper in the last three years.

Continue reading about the high yen not translating to savings →

Annals of cheap: High yen supermarket discounts

Monday, August 16th, 2010

Making your yen go further

Making your yen go further

Deflation is a drag on the economy since it keeps wages low and depresses demand, but most consumers like it for reasons that aren’t difficult to comprehend. The recent spike in the value of the yen should also translate as savings at the cash register, certainly in terms of imported goods, but the lag time is difficult to gauge and, in any case, it seems a lot of importers and wholesalers just refuse to pass the savings on to the public. As reported in this space earlier, imported cheese should be cheaper, but it hasn’t really changed at all for years, supposedly because it’s considered something of a “luxury,” which means . . . what? Cheese importers have some sort of right to gouge Japanese cheese lovers?

In any case, starting Aug. 16, several nationwide supermarket chains are marking down select items on their shelves because of the high yen. Ito-Yokado, with 161 stores throughout Japan, is discounting at least 20 items a day from 10 percent to 50 percent. Many of the items are packaged goods (Crystal Geyser water, ¥78 for 500 ml) but some are agricultural products (South African grapefruit, ¥88), which is good news considering how expensive fresh produce has been this summer. The Jusco chain (300 stores), which belongs to Aeon, will offer more than 50 items at discount, including salmon from Chile (¥178 for 100 grams) and American broccoli (100 grams for ¥88), with different items being added or taken from the list on a day-to-day basis. Ito-Yokado’s program ends Aug. 22, and Jusco says that its discount plan will continue “until at least Aug. 22.” As for other big chains, Daiei says it it considering doing the same, and Seiyu has no plan to get on the bandwagon.

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