TOKYO -- Japanese businesses received less for cross-border licensing and technology instruction in the year ended March 2017 as appreciation in the yen shrunk the payments when converted into the local currency.
The value of technology exports came to 3.57 trillion yen ($32.2 billion) for fiscal 2016, down 9.6% on the year, data from the Ministry of Internal Affairs shows. The decline marks the first in five years.
Many of the receipts booked as technology exports involved parent companies collecting fees from overseas subsidiaries for licensing technology and providing instruction. Transactions between parents and subsidiaries fell 7.3% to 2.73 trillion yen.
Receipts from companies operating in the U.S., the top destination for technology exports, sank 13.5% to 1.38 trillion yen. Payments from other areas also declined, with Europe recording a 9.6% slide to 536.8 billion yen and China showing a 6.5% decrease to 445.6 billion yen.
The yen averaged 108 to the dollar in fiscal 2016, a 10% appreciation from 120 yen in fiscal 2015. The Japanese currency has weakened somewhat so far this fiscal year. This, together with "rising overseas production, suggests that technology exports may go back up again," predicts Satoshi Osanai of the Daiwa Institute of Research.
The decline in the value of technology exports in fiscal 2016 marks a reversal from record highs in the four preceding years, when Japanese businesses pushed hard to bring their homegrown technologies to the world.