Economic Gloomy Exchange Rate Changes Affect Japanese Textile Industry

Recently, because of the dim economic growth prospects in the US, the US dollar has continued to decline against other major currencies in the West.

The New York dollar fell to 1 to 98.88 in the yen exchange rate, the lowest level in 12 years.

Some Japanese research institutions have pointed out that the US dollar exchange rate of the yen will break through another $1 after 12 years to exchange for 100 yen, which will weaken Japan's export competitiveness and may have an adverse effect on Japan's overall economy, especially the textile and garment industry.

For Japanese textile and garment enterprises, the appreciation of the yen will help reduce the cost of imports of raw materials and finished products, but at the same time face the negative impact of rising crude oil and energy costs.

Therefore, the appreciation of the Japanese yen is not a good thing.

Japanese textile industry generally believes that for the textile and garment enterprises mainly importing Chinese textile and garment, although the appreciation of the yen can reduce the negative impact brought about by the appreciation of RMB and labor costs to a certain extent, it does not mean the rise in efficiency.

Of course, if the US dollar continues to run low, it will help Japanese textile and garment enterprises to invest in the United States, but this effect is also not big.

For enterprises that rely on export business, the appreciation of the Japanese yen can be more harmful than the profits. Especially for those textile enterprises that are "producing in China and selling in the US", the drastic change of the main currency exchange rate may even bring a fatal blow to the enterprises.

From the overall pattern of textile and apparel trade, Japanese textile and clothing imports are much larger than exports. China is the main source country of imported clothing in Japan.

Therefore, the positive impact of the appreciation of the yen is Japanese enterprises importing garments from China.

Especially for those trading companies that are troubled by the rising prices of raw materials, rising domestic production costs and other adverse factors, the appreciation of the yen can be said to be "long drought."

According to the introduction, as the RMB exchange rate continues to rise, the import clothing costs of some large trading companies in Japan have risen by 5~7%, and the appreciation of the yen can basically offset the negative impact of the appreciation of the renminbi.

However, many professional trading companies represented by Josen textile company believe that if we look at this issue from another angle, we can understand that "the appreciation of the yen only offset the negative impact of the appreciation of the renminbi, and has no positive significance for the improvement of the efficiency".

At the same time, Japan's domestic clothing market downturn is also an important reason why textile and garment enterprises dare not have an optimistic estimate of the appreciation of the yen.

A large textile trade company responsible person said: "recently, many retail enterprises asked to reduce wholesale clothing prices, the decline is equivalent to the appreciation of the yen.

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The appreciation of the yen is an important disadvantage for textile export enterprises.

Dongli, MITSUBISHI Liyang, MITSUBISHI textile and other enterprises believe: "textile enterprises in the US dollar settlement currency are generally worried that the appreciation of the yen will bring about a decrease in export volume.

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The Dongli based export oriented business in Southeast Asia pointed out: "because the currencies of Southeast Asian countries also show a trend of appreciation, if the US dollar further depreciates, the performance of Southeast Asian businesses is not optimistic.

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Sakai said that the impact of the appreciation of the yen on performance was mainly manifested in two aspects: first, the deterioration of export business performance in the US market, and the two was that after the US trade, customers would be required to lower the delivery price.

In terms of industrial textiles, textile enterprises worry that the appreciation of the yen will lead to a sharp decline in automobile exports, thus affecting the textile enterprises.

Before that, most Japanese exporters made and implemented their business plans at a price of 1 US dollars to 105 yen.

According to the relevant agencies, if the exchange rate of US $105 is on the basis of 105 yen, the dollar to yen ratio will drop by 1 yen, Toyota Auto Body Co's annual revenue will be reduced by 35 billion yen, Honda Motor Company will reduce 20 billion yen, and some export companies even suffer losses.

The reduction of automobile production and sales is bound to affect the tire companies providing tire cord and interior textile enterprises.

Toyo textile company believes that if the yen continues to rise, textile enterprises may face the pressure of reducing prices from automobile manufacturers, which is a "bad news" for textile enterprises as suppliers.

Because the domestic population of Japan has been decreasing since 2006, the textile and garment industry generally believes that the textile and clothing consumption market is hard to expand further.

However, the appreciation of the yen has added uncertainty to the overseas investment strategy of these enterprises.

Generally speaking, the improvement of the yen to us dollar exchange rate has two positive meanings for Japanese enterprises to invest in the US: first, the initial investment in yen settlement can be controlled to a certain extent; two, it is easier to buy American enterprises or American brands.

However, if the United States is considered as a consumer area, the negative impact of yen appreciation on the US direct investment is greater than the positive impact.

The trigger for the continued depreciation of the US dollar is the subprime mortgage crisis in the United States. From the current US economic trend, the impact of the subprime crisis has not been eliminated. Most economists believe that the US economy may fall into a long-term downturn.

The Dongli company has made it clear: "the company has not studied the plan to increase investment in the US by means of the depreciation of the US dollar.

"Many companies have also been very cautious in investing in the United States because" if the US dollar continues to fall, the proceeds from the sale of shares or brands of acquired companies are likely to shrink. "

The currencies involved in the foreign exchange market also include Hong Kong dollars and Renminbi.

As the Hong Kong dollar adopted the US dollar linked exchange rate mechanism, the exchange rate of Hong Kong dollar against the RMB also declined significantly.

Although Yagi and other textile trading enterprises believe that "the depreciation of the Hong Kong dollar can bring business opportunities for the export of Hongkong garments to the mainland of China", the uncertainty in the textile trade market increases with the exchange rate changes.