SANJO-SYOUTETSU ASSOCIATION

Sanjo Steel Association Chairmanr Ryoji Aiba

I would like to express my sincere gratitude to all of you for your continued cooperation in our association’s activities.
The Japanese economy has been facing prolonged instability due to rapid changes in the global political landscape and sharp fluctuations in exchange rates. Looking back at recent history, in 2022, while the Beijing Olympics were being held, Russia surrounded and invaded Ukraine. More than two years have passed since then, but the situation remains chaotic with no clear resolution in sight. Furthermore, in October of last year, the Islamic organization Hamas launched an armed attack on Israel, prompting retaliation from the Israeli military, which has led to an escalation of conflict in the Middle East. These global events have impacted the world economy, slowing growth while accelerating inflation.
Regarding exchange rate trends, in 2014, the USD/JPY exchange rate was around 1 USD = 100 JPY. However, during the long holiday period from April to May 2024, it temporarily reached 1 USD = 160 JPY, marking the weakest yen level in 34 years. The yen continues to depreciate, with no signs of stopping. This has led to a sharp increase in domestic food prices and energy costs, and the upward trend in prices continues today.
The causes of the yen’s depreciation are complex and multifaceted. Factors include interest rate differentials between Japan and other countries, Japan’s declining population and aging society, the increasing trend of large corporations earning profits overseas, the decline in domestic manufacturing capabilities, and issues related to Japan’s energy policies.
I believe that the economic challenges Japan faces today are the result of long-term national policies, often referred to as the “Lost 30 Years.” A major factor is the decline in Japan’s ability to generate domestic earnings. To overcome this situation, the most urgent national priority should be revitalizing Japan’s manufacturing industry.
2024 is a significant election year, with major political events such as the Tokyo gubernatorial election in July and the U.S. presidential election in November. The outcomes remain uncertain, but domestically, I hope to see bold policies aimed at revitalizing the Japanese economy. Additionally, we must closely monitor how the U.S. presidential election results will impact Japan’s economy.
As members of this association, you are directly involved with the prices of steel materials and the business conditions of your clients. I am sure you feel that the current situation surrounding our industry is extremely challenging. Our association members handle steel materials, which serve as the foundation for value creation in industries such as manufacturing and construction. The growth of these industries is directly linked to the prosperity of our own sector.
This fiscal year, we plan to expand subsidies for committee activities and promote active information exchange among members. We sincerely hope that you will participate in our association’s activities.