POLL-Half of Japan manufacturers say top wish is for new govt to weaken yen
TOKYO, Dec 7 (Reuters) - Half of Japan's manufacturers say their top request for the winner of this month's parliamentary election is a push to weaken the yen, which they see as critical to reviving the nation's economy, a Reuters poll showed.
About two-thirds of the 400 firms surveyed in the Reuters Corporate Survey indicated they don't expect the Japanese economy to start improving until the second half of 2013 or later, increasing the need for the next lower house regime to pursue policies to boost the competitiveness of Japanese goods overseas.
The latest media polls show the conservative Liberal Democratic Party (LDP) looks on course to win a surprisingly solid majority in the Dec. 16 parliamentary election.
That would mean former Prime Minister Shinzo Abe, who heads the LDP, would likely return to the top job. He has called for radical monetary easing by the Bank of Japan (BOJ) to beat persistent deflation and a strong yen.
"Weakening the yen will help improve competitiveness," said Heizo Takenaka, an economist with strong ties to the LDP.
"If you look at the real effective exchange rate for the yen, it's around the same level it was at in 2001. The difference between then and now is that companies like Samsung are more competitive and companies like Panasonic are less," said Takenaka, who was also a former economics minister in Prime Minister Junichiro Koizumi's cabinet.
With overall production capacity in surplus and heavily concentrated at home, easing of the yen would be the simplest way for Japan Inc. to compensate for these disadvantages as they increase their portion of sales outside Japan, industry watchers say.
"Sales composition is changing (for Japanese manufacturers), but their production composition is not changing fast enough to catch up ... so only if the yen is weak will they be able to (leverage) this mismatch," said Shintaro Okuno, a partner at consultants Bain & Company Japan.
The yen has been weakening against the U.S. dollar since Nov. 14, when talk of a concrete date to dissolve parliament's lower house first arose, lifting the possibility of a new government pushing the Bank of Japan towards monetary easing.
More than three-quarters of Japanese firms surveyed between Nov. 20 and Dec. 3 want the yen/dollar rate to be at about 85 yen or weaker, according to a poll conducted for Thomson Reuters by Nikkei Research.
An easing in the yen's strength is a blessing for the corporate sector as Japan's export-reliant economy struggles to avoid a recession, although many economists say it is already in a mild recession.
Of the nearly 400 companies that responded to the poll question, 46 percent said they expected the economy to move towards recovery in the second half of the 2013 calendar year, with 23 percent not expecting a pickup at all next year.
The sentiment runs harsher than in another Reuters poll of economists taken last month that showed Japan returning to moderate growth in the first quarter of 2013.
Japan's economy outperformed other G7 nations in the first half of this year due to robust private consumption and spending for reconstruction. But the global slowdown may have pushed the economy into recession in the second half.
Already reeling from a listless U.S. economy and crimped demand for Japanese goods due to Europe's debt crisis, Tokyo has come under increased pressure as a result of its diplomatic spat with top trade partner China that included protests and boycotts of Japanese goods.
Earlier this week, both Nissan Motor Co Ltd and Honda Motor Co Ltd said China sales in November plunged 30 percent from a year earlier, while Toyota Motor Corp reported an annual sales drop of 22 percent for the same period.
On Wednesday, a top executive at Nissan, which has the highest exposure to China among Japanese carmakers, said showroom traffic in China has nearly returned to levels seen a year earlier.
Nearly two-thirds of companies in the Reuters survey said their discussions for new business in China have not yet returned to the levels seen before Sino-Japanese relations deteriorated earlier this year.
"Much is uncertain following the change in power (in China) since the true face of the new administration has yet to show itself," said one respondent from a nonferrous metal company.
The poll was taken alongside the monthly Reuters Tankan survey, which showed on Thursday that sentiment among Japanese manufacturers edged up for the first time since July in a sign that the domestic economy may have bottomed out.
The Reuters Corporate Survey polls 400 target companies, with the firms split evenly between manufacturing and non-manufacturing. Not all companies responded to every question, and respondents provided answers on the condition of anonymity.
(Additional reporting by Izumi Nakagawa, Stanley White; Editing by Ken Wills)