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To: lorne who wrote (5274)	1/5/1998 7:20:00 PM
From: lorne	Respond to of 116753

Yen's latest depreciation Yomiuri Shimbun The yen's continued plunge against the U.S. dollar could lead to increased costs in areas such as electric power, but would at least temporarily benefit auto, appliance and other manufacturing sectors, analysts said. The yen dipped to 132 yen to the U.S. dollar on Monday, a level the currency has not seen since May 1992. Every 1 yen dip in the exchange rate could increase annual revenues of Toyota Motor Corp. and Nissan Motor Co. by about 10 billion yen and about 7 billion yen respectively, the analysts said. As domestic auto sales have been stale for nine consecutive months, automakers could boost performance through exports. The companies, however, are a bit hesitant to do so because they fear increased trade friction, the analysts said. Toyota, Nissan, Honda Motor Co. and Mitsubishi Motors Corp. plan to decrease exports this year by 4.9 percent to 8 percent from last year. Nissan said it would not increase exports even if the yen depreciates further. The yen's depreciation could also adversely affect plans to shift production abroad, the analysts said. As the yen sinks, costs of auto parts in the United States, Europe and other countries rise, undermining competitiveness, they said. Toyota said the yen should trade between 110 yen and 120, yen adding that an exchange rate above the current level could do more harm than good. Meanwhile, Matsushita Electric Industrial Co. has been cautious, saying they feared that they would pay more for raw materials, causing them to raise prices on the domestic market and curtail domestic demand, even though a weak yen would strengthen export momentum in the short term. Matsushita said it would be best for the yen to stay in the vicinity of 120 yen to the dollar. Fujitsu Ltd. said their exports would grow if the yen remained at the 130 yen level. On the contrary, oil wholesalers said their business performance would be seriously damaged by the depreciation of the yen if resulting price hikes are not cushioned by a rise in retail oil prices. Observers said every 1 yen drop in the exchange rate would cause imported oil and other petroleum products to rise by about 47 billion yen annually.