JAPAN'S Ministry of Transport (MOT) has released results of discussions with eight ocean-going shipping firms on their response to the trend of rising yen. According to the report, the shipping firms are not only trying to cut expenses, but also to convert costs to a dollar-denomination basis in a bid to ride out current difficulties. They also intend to expand the scope of yen-denomination for freight from a long and medium-term viewpoint. Since the companies' dollar-denominated earnings which have no foreign exchange guarantees, account for as much as 60 per cent of their total revenues, the rise in the yen's value has substantially reduced revenues and shrunk profits. Allowing for differences in the form and scope of business among shipping companies, an increase of one yen per dollar can result in losses ranging from tens of million yen to 350 million yen (HK$26 million). For the liner companies, these losses can range from 200 million yen to 350 million yen. The higher yen has not only cut into shipping companies' profits, but also resulted in declining export cargos. For example, declines in motor vehicle exports have resulted in a surplus of pure car carriers (PCCs), forcing some of them to remain idle. Also, reflecting the prolonged stagnation in the domestic economy, no upsurge has been seen in imports which should have otherwise benefitted from a higher yen. According to the ministry, the current appreciation of the yen has resulted in a more severe situation than when the Plaza Accord boosted the yen. In view of the fact that Japanese-flag ships are losing their cost competitiveness with Japanese crew on board, all shipping companies intend to reduce the number of Japanese crewmen.