Survey: Over 54% small and midsize firms say weak yen has negative impact

A survey has found that a majority of Japan's small and midsize companies is seeing more negative than positive impact from the weak yen against the dollar.

The Japan Chamber of Commerce and Industry received responses from 2008 businesses to its survey conducted in mid-June.

Asked about the impact of the depreciating yen, only 2.3 percent said it is a plus for their business performance. In comparison, 54.8 percent said it has more adverse effects, up 7 percentage points from a survey taken in November last year.

Meanwhile,19.8 percent responded that the yen's depreciation has neither positive nor negative effects, while 7.8 percent said its positive and negative effects are almost equal.

Many of the companies that say the falling yen has been a major disadvantage for their businesses specify the reasons as the rise in purchasing costs of raw materials and other products, as well as surging fuel and energy prices.

Nearly 70 percent of responding companies said they believe the appropriate level of the yen-dollar exchange rate is between 110 yen and 135 yen to the dollar. A little over 10 percent said a level of 135 yen or weaker against the dollar is appropriate.

The chamber of commerce says the negative impact from the yen's persisting depreciation is becoming more serious on small and midsize companies. It says tourism-related industries can expect growing demand from an increase in inbound tourists driven by the weak yen, but they may be unable to fully take advantage on this due to worker shortages.