“Japanese Firms Favor Harris Over Trump for Stability and Clear Policy Direction, Reuters Survey Finds”

A survey conducted by Reuters indicated that more Japanese corporations would prefer Kamala Harris as the U.S. President over Donald Trump for a second term, citing concerns about protectionism and erratic policies. This keen interest in November’s U.S. presidential elections stems from Japan’s close ties with the U.S., underscored by the presence of numerous U.S. troops and the significant trade relationships with the U.S. and China, which could be affected by any escalation in U.S.-China trade tensions.

Regarding preference, 43% of Japanese companies favored Harris for aligning well with their business strategies, whereas only 8% voiced support for Trump. A large portion, 46%, was indifferent, expressing that either candidate would suffice, and a small fraction, 3%, had no preference for either candidate. A ceramics manufacturer manager voiced concerns over potential trade wars and policy challenges under Trump, necessitating strategy adjustments. Japanese companies have experienced strained relations due to Trump’s demands for increased financial contributions for military aid and trade disagreements.

An official from a chemical company expressed confidence that a Harris administration would likely maintain existing policies, offering businesses a clearer vision of the future. In anticipation of a second Trump term, companies considered revising foreign exchange strategies (34%), realigning supply chains (28%), and scaling down their operations in China (21%), wary of Trump’s proposals for tariffs that could shake up global trade.

The survey, conducted by Nikkei Research for Reuters, involved 243 companies responding out of 506 contacted between July 31 and August 9. Irrespective of the election’s outcome, 13% of Japanese firms contemplate reducing their Chinese operations, citing economic stagnation, competitive pricing pressures, and security risks. This follows announcements from major companies like Honda Motor and Nippon Steel about cutbacks in China amidst its economic downturn.

Regarding the yen’s valuation, 24% of companies agreed with the Japanese authorities’ interventions in currency markets, which were seen as an attempt to stabilize the depreciating yen, reaching a 38-year low against the dollar. While there’s a call for the Bank of Japan to adjust interest rates to support the yen, opinions vary, with 51% suggesting rate changes should only respond to drastic fluctuations in the exchange rate. Expectations for the yen’s performance by year-end varied among responders, illustrating the ongoing uncertainty in currency markets.