Japanese economy Rate hike to help Thai exporters
Bank of Japan's first rise in seven years likely to see spending increase, economist says
The recent decision by the Bank of Japan to raise the Japanese interest rate should benefit Thai exporters, as this should bring more money into the system and lead to more imports to cushion the effect from the recent turbulence in the yen, says a Japanese economist. Speaking through a teleconference call from Tokyo during a lecture on "The Current Situation on the Japanese Economy and Society", Sumimaru Odano of Shiga University said the first rate hike in seven years should yield some extra earning for depositors, and thus they should be encouraged to spend. Two weeks ago, Japan's central bank raised its key interest rate from virtually zero to 0.25 percent. The decision has lifted the cost of money in the world's second-largest economy. At the event organised by Japan's Association for Overseas Technical Scholarship, Odano said that until the rate hike, the combined deposit funds in Japan, worth US$3 trillion (Bt114 trillion), yielded no interest profits. While he did not expect any significant negative impact on Thai exporters, he did believed that Japanese importers might be encouraged to import more from Thailand. As a result of the rate hike, the yen is set to appreciate against the US dollar, plus the Japanese currency has recently experienced turbulent movement. Odano suggested Thai exporters improve their products' quality and innovation, because these are the key elements for success in the Japanese market. For instance, he said a simple way was to improve label instructions. He said he just bought a fabulous-tasting curry paste from Thailand, but the label carried no English instructions. Sometimes, he has also found no Japanese translation written on the labels of Thai exports. "I would have graded them C-minus," he quipped. He said that whereas the US market was most concerned with price competition, prices were not regarded as the primary concern among Japanese business corporations. On the other hand, they are seriously concerned with market positioning, and so companies are more focused on relative market share. For instance, Toyota has set a target of maintaining its 40-per-cent share of the car market. The company must introduce new product lines every year to maintain that level.
Jeerawat Na Thalang The Nation
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