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Japanese yen weakness to hit Korean automobile industry hard
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Thursday, 21 Mar 2013

Yonhap reported that the Japanese yen's continued depreciation will likely hit South Korea's automobile, steel and textile industries hard by weakening their competitiveness against Japanese products in the global market.

The Japanese currency traded at JPY 95.25 per dollar on Friday, down 21.5% from JPY 78.38 quoted on September 19th, with its value against the Korean won tumbling 23.5% as of end February from early June 2012.

The Korea Institute for Industrial Economics and Trade in its report said that "South Korea needs to step up efforts to diversify its key export items and also strengthen the competitiveness of products against Japanese competitors."

According to KIET, every drop of 1% in the yen won exchange rate leads to a 0.18% fall in South Korea's total exports.

Seoul's commerce ministry said that apparently affected, at least partly, by the already weaker Japanese yen, South Korea's overall exports dipped 8.6% from a year earlier in February.

The report added that unlike the automobile and steel industries that will be most affected by a weaker yen, the country's petrochemical, information technology and shipbuilding industries will likely experience less pressure from their Japanese competitors

Source - Yonhap


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