Japanese M&A Genius... "Dollar-Yen Exchange Rate Will Fall Below 120 Yen"

Yoshihisa Kainuma, CEO of MinebeaMitsumi

[Asia Economy Reporter Lee Ji-eun] Yoshihisa Kainuma, CEO of MinebeaMitsumi, a Japanese M&A expert and electronics manufacturer, predicted that the dollar-yen exchange rate will soon fall below 120 yen, indicating a strengthening of the yen.

According to Bloomberg on the 19th (local time), CEO Kainuma forecasted that the yen exchange rate could drop from the current level of around 128 yen per dollar to below 120 yen. As of the morning of the 20th, the yen was trading at 128.60 yen per dollar in the Tokyo foreign exchange market.

Last year, the Bank of Japan (BOJ), Japan's central bank, intervened in the market by selling dollars and buying yen, causing the yen exchange rate, which had been soaring daily, to start declining in November. Subsequently, on the 3rd, it settled in the 120 yen range for the first time in six months.

CEO Kainuma stated that if the yen exchange rate falls below 120 yen, it would create opportunities to acquire overseas companies. Previously, in September last year, he warned that acquiring foreign companies was risky when the yen exchange rate was in the 140 yen range per dollar.

He especially expects that with the easing of the COVID-19 spread and the resumption of free travel, corporate acquisition deals will become easier this year. He also mentioned that domestic companies are potentially being considered as acquisition targets.

MinebeaMitsumi supplies various parts to companies such as Nintendo, Toyota Motor Corporation, and Apple. Since Kainuma took office as CEO in 2009, MinebeaMitsumi has completed a total of 24 M&A deals. CEO Kainuma has shown interest in electronics and semiconductor companies and has made bold decisions to acquire automotive parts company Yushin and analog semiconductor manufacturer Airbrick. He aims to secure additional revenue between 500 billion and 800 billion yen through M&A by 2028.

The reason this corporate raider is betting on yen strength is analyzed to be due to expectations of a shift toward tightening in Japan's monetary policy. After the BOJ partially revised its monetary policy last month by raising the allowable fluctuation range of long-term interest rates, investors have interpreted this as a signal of tightening.

Governor Haruhiko Kuroda explained that the move was to correct distortions in the bond market, but as overseas investors have consecutively sold large amounts of government bonds, Japan's bond market has been volatile. The yield on Japan's 10-year government bonds surpassed the long-term interest rate fluctuation limit of 0.5% due to massive sales by overseas hedge funds.

Singapore financial information company SAV Market forecasted that if the BOJ maintains its current monetary policy until the next monetary policy meeting, the yen's value could further decline against the dollar.

This content was produced with the assistance of AI translation services.