April 3, 2014 3:04 am JST

Japan Inc. expects weakest yen in 5 years in fiscal 2014

TOKYO -- Large Japanese companies appear less concerned that the yen will strengthen against the dollar in the coming year, a survey of their assumed exchange rates for fiscal 2014 shows.

     Big manufacturers see the yen trending to a roughly five-year low of 99.48 against the greenback this fiscal year, according to central bank data released Wednesday.

     And large businesses across nearly all industries anticipate a weaker yen. Electrical machinery makers forecast the yen at 99 to the dollar, 1.12 yen softer than their fiscal 2013 estimate. Automakers, meanwhile, see the yen at 100.02, 0.80 yen weaker.

     Companies expect a softer yen because the Japanese currency has continued to slide. It did shows signs of strengthening early this year, but has generally stayed above 100 against the dollar since the end of November.

     Since March 2013, large companies have incrementally shifted their assumed rates toward a weaker yen. In fact, the gap between anticipated and actual trends has shrunk to its narrowest point since the effects of Prime Minister Shinzo Abe's economic reforms, dubbed Abenomics, began to be considered in November 2012.

     "A realization is spreading that it will be hard for the yen to trend stronger than 100 to the dollar," said Akira Moroga at Aozora Bank.

     But as some analysts note, the narrower gap leaves exporters with less leeway to make earnings upgrades based on the exchange rate.