Vietnamese firms exporting to Japan are concerned over the weakening yen, which has slid 20 percent against the Vietnamese đồng (VND) over the last six months.
With Japan one of the main exporting markets of the country, the yen depreciation has immediately affected many export contracts, according to exporters.
Six months ago, one yen was exchanged for 246.05 VND, but the rate dipped to only 205.34 dong early this week, a decrease of VND40.71.
Việt Nam’s export turnovers to Japan topped US$3.6 billion in the first four months of this year, according to the Việt Nam Trade Office in Japan.
Crude oil exports dropped to $731 million from the $999 million recorded in the same period last year, while electronics parts slumped to $10 million.
Sài Gòn Plastic Co. has recently renegotiated with its Japanese partner on the US$830,000 contract to export 84,000 stroller pads to the East Asian country in 2013.
“Instead of receiving payment for the exports in VND or yen as earlier contracted, Sài Gòn Plastic decided to cut prices by 0.02 percent, but the Japanese side has to pay in US dollars.”
CEO Cao Văn Sáng said.
The weaker yen means rising import prices for Japanese importers, and a number of such businesses are demanding revisions of their contracts, said Nguyễn Phạm Thành, CEO of Highland Dragon Co, which exports canned tuna to the country.
“Imported shrimp prices in Japan have soared 40 percent, which has made local importers change their buying method.”
Said Nguyễn Văn Kích, CEO of the seafood exporter Cafatex.
Up to 70% percent of the firm’s export sales are from Japan.
“Some Japanese importers now only sign short-term contracts to reduce the risk of stocking a large number of goods at high prices in case the yen restrengthens.”
Importers unhappy, too
Technically speaking, the weakened yen will result in cheaper imported goods from Japan, especially spare parts and raw materials for the local manufacturing sectors.
But this chance has not come at the right time, local importers say.
“I would enjoy the better prices if I were to increase the import of some parts from Japan.”
Said Trần Phương Linh, director of Phương Chau Co, which makes small stroller wheels.
“But I cannot increase investment as the product outlets remain obstructed.”
Nguyễn Thới Hồ Nhật, who runs the HachiHachi chain in Việt Nam, said the depreciated yen would only pull down prices of the products that are made in Japan.
“Those imported from Japan, but are originally manufactured in a third nation such as South Korea and China, have become much more expensive.”
HachiHachi has slashed prices of certain products by 25 percent, but the move was made “only to attract customers, not because of the weakened yen.”