Strong Yen Hurts Japan Inc. Profits

The transcript discusses the negative impact of the yen's decline on Japan's economy, particularly affecting the goals of Abenomics. It highlights how companies face challenges in raising capital and wages due to a stronger yen, which also exacerbates deflation and debt issues. Despite monetary policy efforts, the yen's strength persists, leading companies to adopt conservative forecasts. Investors have reacted by selling Japanese stocks and shifting to domestic market shares, further affecting the economy.

What is one of the main goals of Abenomics that is being undermined by the stronger yen?

• Increasing exports

• Boosting domestic investment

• Improving healthcare

• Reducing taxes

How has the stronger yen affected companies like Fast Retailing?

• Allowed them to raise wages significantly

• Increased their profit margins

• Led to expansion in foreign markets

• Forced them to cut their profit outlook

What is a deflationary effect of a stronger yen?

• Increased government spending

• Higher inflation rates

• Difficulty in escaping the debt trap

• Easier access to foreign markets

How do Japanese companies typically respond to periods of yen strengthening?

• By investing heavily in foreign assets

• By reducing their workforce

• By adopting conservative forecasts

• By increasing their export prices

What shift has been observed among investors in response to the yen's appreciation?

• Withdrawal from all stock markets

• Increased investment in Japanese stocks

• Focus on international market shares

• Shift to domestic market shares