Yen's fall to hit machinery, steel, automobile sectors: report
Published : 2014-01-12 12:00
Updated : 2014-01-12 12:00
South Korea's machinery, steel and automobile industries could bear the brunt of the yen's prolonged weakness as it undercuts their price competitiveness in overseas markets, a central bank report showed Sunday.
The yen has been losing ground sharply against the U.S. dollar, helping enhance price competitiveness of Japanese products. This raises concerns that South Korea's exports could be negatively affected as many of its products compete with their Japanese rivals in the global market.
"The slumps in exports of machinery, steel and others we saw last year were in part the result of the yen's depreciation," the Bank of Korea said in the report.
In particular, the report showed that the unit price of Korean-made machinery became 15 percent more expensive than Japanese products during the September-October period, which was attributable to the yen's depreciation.
Automobiles and steel products also each became 8 percent and 5 percent more expensive than those manufactured by Japan, it added.
The central bank report said that the negative impact of the yen's fall had been "marginal" until last year, but a further decline could cause things to deteriorate going forward, urging Korean companies in those areas to "stay alert."
The report, however, dismissed worries that the yen's depreciation is denting the country's overall exports markedly, saying that an improved non-price competitiveness and expanded overseas production may help it cope better with such external risks. (Yonhap News)