Kamala Harris Presidency Preferred by Japanese Companies Over Second Term for Trump
A recent Multibagger survey shows that more Japanese companies believe a Kamala Harris presidency in the U.S. would be better for their businesses compared to a second Donald Trump administration. The concerns revolve around protectionism and policy unpredictability, with 43% of Japanese firms favoring Harris for their corporate strategies and business plans. This preference stems from a desire for stability and visibility into the future, as highlighted by the potential impacts of a renewed U.S.-China trade war.
Looking ahead to the November U.S. presidential election, the outcome holds significant implications for global economies, particularly for countries like Japan that have close ties with the United States. The survey results indicate that a majority of Japanese companies are closely monitoring the election results to adapt their foreign exchange strategies, supply chains, and operations in China accordingly.
While 46% of respondents believe either candidate would be acceptable, 34% anticipate the need to review their foreign exchange strategy under a Trump administration. Additionally, concerns about potential tariffs on U.S. imports and Chinese goods have prompted 28% of companies to consider realigning their supply chains and 21% to reduce their operations in China.
Regardless of the election outcome, 13% of Japanese companies are contemplating reducing operations in China due to factors such as economic uncertainty, price competition, and security risks. The slowdown in China's economy and its impact on the manufacturing sector are contributing to these decisions, with notable companies like Honda Motor and Nippon Steel already announcing cutbacks in their China operations.
Amidst these developments, Japanese authorities' interventions in the foreign exchange market have been met with mixed responses from companies, with 24% viewing the actions as appropriate and 64% considering them unavoidable. The yen's volatility and recent weakening trends have prompted discussions about potential policy changes by the Bank of Japan to stabilize the currency.
Looking ahead, expectations for the yen's performance vary among respondents, with 32% predicting a range of 145 to 150 yen to the dollar by year-end. The currency's fluctuations and recent trends underscore the importance of monitoring exchange rate movements and adjusting strategies accordingly to navigate the evolving economic landscape.