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, a report said Monday.
The Japanese currency traded at 95.25 yen per dollar on Friday, down 21.5 percent from 78.38 yen quoted on Sept. 19, with its value against the Korean won tumbling 23.5 percent as of end-February from early June last year.
“South Korea needs to step up efforts to diversify its key export items and also strengthen the competitiveness of products against Japanese competitors,” the Korea Institute for Industrial Economics and Trade said in its report.
According to KIET, every drop of 1 percent in the yen-won exchange rate leads to a 0.18 percent fall in South Korea’s total exports.
Apparently affected, at least partly, by the already weaker Japanese yen, South Korea’s overall exports dipped 8.6 percent from a year earlier in February, Seoul’s commerce ministry said earlier.
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, the report said.
This is because of their superior competitiveness, mainly stemming from the diversity of their products, it added. (Yonhap News)
