Summarising the findings.
Concerns About Trump Presidency:
- Nearly 75% of Japanese companies expect Donald Trump's next term as U.S. president to negatively impact the business environment.
- Key concerns include planned tariff hikes and heightened U.S.-China trade tensions.
Impact of Tariff Hikes:
- Trump has threatened tariffs exceeding 60% on Chinese imports, with initial tariffs projected to range from 15% to 60%.
- Additional threats include a 25% levy on goods from Canada and Mexico, where many Japanese automakers operate factories.
- Two-thirds of firms indicate no planned changes to business strategy, while 22% would cut costs and 8% would expand in other markets.
Earnings Outlook:
- Half of Japanese companies expect higher earnings in the next fiscal year.
- About 20% anticipate a decline, while the remainder foresee stable earnings.
- Improved profits are attributed to rate hikes, stronger freight rates, and a tourism boom.
Yen and Exchange Rate Expectations:
- Approximately 60% of firms predict the dollar will trade between 140 yen and 150 yen in 2025.
Bank of Japan Leadership:
- Over half of respondents expressed confidence in BOJ Governor Kazuo Ueda’s ability to normalize monetary policy after ending negative interest rates in March.
- The BOJ raised its short-term policy target to 0.25% in July, with expectations of another rate hike soon.
Survey Details:
- Conducted by Nikkei Research for Reuters between Nov. 27 and Dec. 6.
- Survey included 505 companies, with 236 responses provided anonymously.
***
The BoJ meet next week, on hold?
- USD/JPY sent for a spin but now moving higher as BOJ rate hike odds fade
- USD/JPY sent for a spin but now moving higher as BOJ rate hike odds fade
