Toyota Threatens to Leave Japan

The headaches Japanese carmakers are experiencing because of the strengthening of the Japanese currency, the yen, are getting more and more unbearable. As still the largest carmaker in the world and as one whose main markets is the US, Toyota is losing billions with every increase of the yen.

The situation has become so dramatic that, according to Nikkei, the Japanese carmaker has asked the government to step in and stop the yen from climbing. Apparently, Toyota is using its role of huge industry player to threaten it will be moving production outside Japan if the situation continues.

Nikkei cites Satoshi Ozawa, Toyota’s chief financial officer, as saying that if by next March (the end of the current fiscal year) the loss Toyota will be reporting will be more than expected, the carmaker will leave Japan.

Currently, the yen is at its stronger point in the last 15 years compared to the dollar. The Japanese government is aware of the problems this situation poses for exports and admits that something should be done to prevent the yen from maintaining its value for much longer.

Until action to bring down the yen will be taken though, Finance Minister Yoshihiko Noda says that Japan must look at this as to an opportunity to overseas assets or perform mergers and acquisitions.

Late last week, Toyota reported 8.7 billion yen ($1.2 billion) in profit for the second quarter of the fiscal year. The results, although good, have been sabotaged however by the strong yen, which prevented more profit in the US.