A recent survey indicates that more Japanese companies believe a presidency under Kamala Harris would be more favorable for their businesses compared to a second term for Donald Trump. The Reuters survey, released on Thursday, highlights concerns among respondents regarding protectionism and the unpredictability of policies.
The outcome of the U.S. presidential election in November is being closely monitored globally, especially given Japan’s status as a close ally of the United States, hosting tens of thousands of American troops. A renewed U.S.-China trade war would significantly affect Japan, as both nations are among its top trading partners.
The survey revealed that approximately 43 percent of Japanese firms prefer Harris based on their corporate strategies and business plans, while only 8 percent favor Trump. Meanwhile, 46 percent stated that either candidate would be acceptable to them, with 3 percent expressing no preference.
Concerns regarding potential economic friction and security threats under another Trump administration were voiced by a ceramics manufacturer manager, who noted the necessity to adjust business strategies in such a scenario. Japanese relations with the Trump administration have previously been strained due to demands for increased military payments and ongoing trade tensions.
In contrast, an official from a chemicals company expressed optimism about Harris, stating that her presidency would likely ensure the continuation of current policies, providing businesses with clearer foresight. When asked about necessary changes under Trump, 34 percent indicated a need to reassess their foreign exchange strategy, while 28 percent anticipated realigning their supply chains, and 21 percent planned to scale back their operations in China.
Trump has previously suggested implementing a 10 percent universal tariff on all U.S. imports and a significant tariff on Chinese goods, which could destabilize global markets.
The survey also examined Japanese companies’ perspectives on their operations in China, revealing that 13 percent are contemplating reducing their presence there, while only 3 percent wish to expand. Among those considering cutbacks, reasons cited included a lack of economic recovery prospects, severe price competition, and economic security concerns.
China’s economic growth has slowed significantly, with its exports experiencing the lowest growth in three months as of July, raising alarms about the future of its manufacturing sector. Prominent Japanese corporations, such as Honda Motor and Nippon Steel, have recently announced reductions in their operations in China.
The survey also found that 24 percent of respondents viewed the Japanese authorities’ recent foreign exchange market interventions as appropriate, while 9 percent deemed them inappropriate. The remaining 64 percent felt such actions were necessary. The yen had been declining despite interventions, hitting a 38-year low against the dollar in early July.
Regarding interest rates, 51 percent of respondents indicated that the Bank of Japan should consider raising rates only when exchange rate fluctuations become excessive, while 22 percent opposed any monetary policy changes aimed at influencing the foreign exchange market. Expectations for the yen’s performance show a variety of predictions, with 32 percent expecting it to stabilize between 145 to 150 yen against the dollar by year-end.