According to Bloomberg article published on December 22, 2022, the jump in the yen after the Bank of Japan’s surprise policy shift this week will provide relief for the country’s steel industry as the move is poised to curb costs of imported raw materials like iron ore and coking coal.
“It’s good that the extreme depreciation of the yen is being corrected,” Eiji Hashimoto, president of Japan’s biggest producer, Nippon Steel Corp., said at a briefing in Tokyo on Thursday. The historic slump in the yen this year was a blow to Japan, which he said was the most dependent among developed countries on foreign purchases of energy, mineral resources and food.
Yoshihisa Kitano, chairman of the Japan Iron and Steel Federation, and also head of JFE Steel Corp., said Wednesday a stronger local currency will improve earnings. He also called for stability in the yen.
Japanese steel executives have long been vocal about the yen’s decline, which ratcheted up the costs of everything from iron ore to coking coal and energy, and outweighed increased revenue at home. Nippon Steel’s Hashimoto said on Thursday he thinks the appropriate level for the currency is 115-120 yen to the dollar, which compares with about 132 yen now.
