A recent Reuters survey indicated that more Japanese companies favor a potential Kamala Harris presidency over a second Donald Trump administration, primarily due to concerns about protectionism and unpredictable policies. The significance of the forthcoming U.S. presidential election is keenly observed globally, particularly in Japan, a staunch U.S. ally housing thousands of American troops. The survey revealed that 43 percent of Japanese firms preferred Harris for their corporate strategies, compared to 8 percent who supported Trump.
Meanwhile, 46 percent expressed no strong preference for either candidate, and 3 percent opted for neither. Concerns were raised by some companies about the implications of another Trump term, such as a potential trade war and economic instabilities that could necessitate changes in business strategies. In contrast, many believe that Harris would likely continue existing policies, offering more predictability.
When asked about possible impacts of a Trump presidency, 34 percent of respondents anticipated needing to reassess their foreign exchange strategies, while 28 percent mentioned supply chain realignments and 21 percent were prepared to scale back operations in China. Trump’s proposals of imposing significant tariffs could threaten international trade relations and disrupt markets.
Separately, the survey highlighted Japanese companies’ considerations regarding their operations in China. Regardless of the U.S. election outcome, 13 percent of respondents are contemplating reducing their Chinese operations. Factors influencing this decision include a perceived lack of economic recovery prospects and heightened competition. Notable Japanese firms like Honda and Nippon Steel have already reported cutbacks in China.
Additionally, the survey revealed mixed opinions about the recent Japanese government interventions in the foreign exchange market. While 24 percent deemed these moves appropriate, a significant majority viewed them as unavoidable given the context. The yen experienced significant fluctuation, reaching a 38-year low earlier this year.
Regarding future expectations for the yen, 32 percent predicted it would trade between 145 to 150 yen against the dollar by year-end, while others foresee the currency strengthening slightly or continuing to weaken. This indicative volatility has raised questions among officials concerning appropriate monetary policy decisions amidst fluctuating exchange rates.