 | SNS: Asia Letter: Q4 2022 NOT ONLY MADE IN CHINA By Scott Foster
"We no longer see China as the world's manufacturing hub." - Noboru Saito, CEO, Japanese In May, TDK announced plans to build a factory in Japan to make multilayer ceramic capacitors for the auto industry.
"Japan is now a brutally competitive production base. Its real effective exchange rate shows the trade-weighted currency, adjusted for its relative lack of inflation. It therefore shows the country's cost-competitiveness. Since its 1995 peak, it has fallen 58%, and by 17.5% from the average for 2021. But over the same period, China's real effective exchange rate has soared, with the result that since 1995, Japan's has fallen 75% relative to China's. Since its 1998 peak against South Korea's, it has fallen 64% - and 15% against its 2021 average." - Nicholas Smith, equity market strategist, CLSA Japan Since January 2021, the yen has dropped from 104 to 144 to the dollar. At the beginning of August, the rate was 133.
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