The yen may strengthen to 75 versus the dollar as the U.S. faces the risk of a credit rating downgrade amid an economic slowdown, said Eisuke Sakakibara, formerly Japan’s top currency official.
To help put this slide into perspective: In the past 4 years the dollar has lost 32% of its value against the Yen. That means the cost of acquiring & producing anime has gone up by 32%.“The U.S. economy is in a worse-than-expected state,” Sakakibara said in an interview in Tokyo yesterday. “The yen may trade in a range of 75 to 80 against the dollar in the not so distant future.”
The U.S. currency’s declining trend will continue as Federal Reserve Chairman Ben S. Bernanke signals his intention to maintain record monetary stimulus, Sakakibara said. The dollar-weakening pressure will outweigh the risk of Japan slipping into an “unprecedented recession” in the wake of a record earthquake and tsunami on March 11, he said.
Sakakibara, 70, said Japan is unlikely to intervene in the currency market to stop the yen’s climb because it may not be able to gain international cooperation again. The Group of Seven countries jointly intervened to stem the yen’s gains in March after the currency soared to a postwar record of 76.25 against the greenback.
That cost will be passed on to consumers and will result in changes in how anime is acquired and or produced in the future.