Looking at the world’s GDP using data from the International Monetary Fund (IMF), we can see that the world’s economy continues to expand. In 1980, GDP was $11.1 trillion. This world GDP will be $33.8 trillion in 2000. Furthermore, the world’s GDP will be $95.8 trillion in 2022. It has grown nine-fold in the last 40 years or so. So, what is Japan’s position in the world? The nominal GDP per capita for 2022 announced by the Cabinet Office in 2023 is $34,000 in dollar terms. This is the lowest figure among developed countries. Other than a labor shortage, Japan has a certain amount of capital and technology. If this capital and technology can be utilized overseas, there is a possibility of recovery.
Kikkoman is a company that has successfully weathered the current yen depreciation. Kikkoman imports raw materials in dollars, so import costs increase during periods of yen depreciation. In order to reduce such risks, the company has created a system to procure raw materials from all over the world, manufacture them, and sell them. Kikkoman does not export soy sauce from Japan to overseas. This is because soy sauce is liquid and bulky, and transportation costs are high. All it takes is to procure raw materials such as soybeans locally, build a factory, and make soy sauce there using Japanese koji. Local production and consumption is the best way to deal with exchange rate risks. Kikkoman popularized meat teriyaki in the United States. This company has made soy sauce a part of the local food culture. It has expanded its business by taking root in the local area and understanding the local needs. Kikkoman’s overseas profits have increased by about four times in the past ten years.
Japan has many small and medium-sized enterprises that are recognized as excellent by the world. It is also the number one in the world in producing parts necessary for advanced technology. A good company is one that says, “We get them to buy at the price we ask.” Furthermore, a company that pays a good price in yen instead of dollars is an excellent company. For example, there are cases where products such as semiconductor manufacturing equipment are exported from Japan, but traded in yen and do not bear exchange risk. In the United States, both imports and exports are almost always in US dollars. In Europe, too, because of the euro, 70 to 80 percent of each country’s exports and imports are in euros. China is also moving to import energy in renminbi. At this point, the weaknesses of the dollar have become apparent. Crude oil, which has a large impact on price increases, is also imported in dollars. It would be great if a system could be created where the Middle East receives yen for crude oil exports and uses that yen for payments.
