Tokyo: Komatsu Ltd, the world's No 2 construction machinery maker, may hike prices of its excavators, dump trucks and other equipment as strength in the yen is pressuring profits, its chief executive said yesterday.
Kunio Noji also said in an interview with Reuters its sales in China remain strong although there are worries the Chinese economy could slow down.
The yen weakened to around 85.60 yen to the dollar yesterday after the Japanese government intervened in the currency market on Wednesday for the first time in six years, clawing the yen back from a 15-year high of 82.87 yen.
The lower rate is still too high, however, to persuade Komatsu, which based its annual earnings forecasts on an average of 89 yen to the dollar, to keep its prices flat. With many other Japanese companies having assumed a similar rate of around 90 yen, Japan's government may face renewed pressure for more intervention.
"I appreciated the government's move to lower the yen's value. But the yen is strong against all other currencies. That is tough for us," said Noji.
"An immediate measure we could take is to raise product prices. In China we are now looking at how we can raise prices when demand surges in the Chinese New Year," Noji added.
Komatsu is assuming a yuan rate of 13.1 yen for the business year to March.
The head of the Japanese automakers' lobby Toshiyuki Shiga told a news conference yesterday he did not consider 85 yen per dollar a weak enough level for the Japanese currency, calling on authorities to keep taking decisive steps in the foreign exchange market.
