A recent survey conducted by Reuters indicates that more Japanese companies prefer a Kamala Harris presidency in the United States over a second Donald Trump term, with concerns about protectionism and unpredictable policies influencing their views. Of the surveyed firms, 43 percent expressed a preference for Harris, while only 8 percent favored Trump. Additionally, 46 percent indicated they would be okay with either candidate, and 3 percent had no preference.
The survey took place between July 31 and August 9 and included responses from 243 out of 506 contacted companies. The ongoing U.S. presidential election is being eyed closely by nations globally, and Japan, a vital ally of the U.S., is particularly concerned, given the presence of a large contingent of U.S. troops and its economic ties with both the U.S. and China.
Concerns about potential economic upheaval under a Trump administration were voiced by respondents, with one ceramics manufacturer manager noting that they might need to alter their business strategy due to a possible trade war and security threats. Conversely, another official from a chemicals company remarked that a Harris presidency would likely maintain the status quo in policies, providing greater predictability.
When asked about the changes they would need to make under a Trump administration, 34 percent cited a need to revise their foreign exchange strategy, while 28 percent mentioned realigning their supply chains, and 21 percent considered reducing operations in China. Trump has suggested implementing tariffs, including a 10 percent universal tariff and a 50 percent tariff on Chinese goods, which could disrupt international markets.
Regardless of who wins the election, 13 percent of Japanese companies are contemplating a reduction in operations in China. Reasons for this include a lack of economic recovery prospects, intense price competition, and economic security risks. Japan’s prominent companies like Honda and Nippon Steel have already made cutbacks in their China operations amid a slower-than-expected Chinese economic recovery and increasing export challenges.
Additionally, the survey revealed that 24 percent of respondents approved of recent foreign exchange market interventions by Japanese authorities, while 64 percent deemed them necessary. The Japanese yen has faced significant depreciation, hitting a 38-year low in early July before a suspected intervention by authorities aimed at stabilizing its value.
Regarding future expectations for the yen, 32 percent anticipate it will trade between 145 to 150 yen to the dollar by year-end, while 25 percent foresee a stronger yen at 140 to 145 yen, and 22 percent predict it could weaken further to 150 to 155 yen. The volatility of the yen added to the uncertainty during the survey period.