TOKYO (AP) — A steady decline in the yen is proving a godsend for exporters such as Toyota and has won solid support from Japan's main trading partners, who are betting the impact on their own currencies will be offset by gains from a recovery in the world's third-largest economy. It's not such good news for entrepreneurs like Thamonwan Thawornthaweewong, whose Angry Bird fish balls, squid rings and other products now cost more to sell in Japan.
The yen slipped past 100 to the U.S. dollar earlier this month and is now hovering near 102 yen per dollar — over 20 percent weaker than six months ago versus the U.S. dollar and euro — a level that is giving pause even to Japanese companies and policymakers.
Japan insists the yen has weakened due to extreme monetary easing aimed at breaking out of deflationary stagnation, not because it is trying to make its exports more competitive.
Whether it's intended or not, countries across Asia are seeing their own currencies pushed higher, as their financial markets are flooded with cash pumped out by the Bank of Japan to help double the country's monetary base and hit a 2 percent inflation target.
Travel budgets of tourists from Thailand and elsewhere are stretching further thanks to the weaker yen. But for Thamonwan, whose company earns about a tenth of its sales in Japan, it's a headache. "It's affecting us because Japanese customers need to pay more," she said. "We are now seeing a slight decline in orders from Japan."
The "Abenomics" blend of fiscal and monetary stimulus and promises of reforms championed by Japanese Prime Minister Shinzo Abe helped boost Japan's growth to 3.5 percent in January to March. But the slide in the yen also has raised the possibility of a "currency war" — where countries use their exchange rates as an economic weapon.