Automobiles, steel, and machinery are the hardest hit areas by weakened yen, according to the Bank of Korea.
If the depreciation of the yen continues, automobiles, steel and machinery will be impacted the most.
In a report published by the Bank of Korea (BOK) titled Impact of Yen in Our Import and Export, the BOK laid last year’s poor performance of auto steel and machinery part exports firmly at the foot of the yen.
Comparing the export price index of machinery manufactured in Korea to that of Japan from September 9 to October 10 of 2013, the report showed a price increase of 15 percent in automobiles and 8 percent in steel manufactured in Korea, reflecting a drop in price competitiveness.
Lee Jae Hyung, an analyst for Tongyang Securities Inc., said, “The report that came out cast a more positive light than was initially expected.” But he added, “However, there is still not much that Bank of Korea can do, as far as interest rates, even as the weak yen persists. That poses a concern.”
The report said that the impact of the yen until last year was limited, but the pace of depreciation was casting a negative outlook, and so exporters should be wary.