Forty-six percent of major manufacturers would relocate their plants and research and development facilities overseas if the yen remained at the level of 76 yen to the dollar for six months or longer, according to a survey conducted by the Economy, Trade and Industry Ministry.
Thirty-two percent of major manufacturers said their operating profit would drop more than 20 percent if the yen stayed at that level for six months or longer.
The survey shows the hollowing out of the nation's industry may be accelerated if the yen stays strong.
The survey announced by the ministry Thursday covered 154 companies--61 major manufacturers and 93 small and midsize companies--and was conducted Aug. 22 to 26 after the yen surged to a postwar record high of 75.95 yen against the dollar in New York on Aug. 19.
About 80 percent of the companies said their profit would drop if the yen remained at the 76 yen level for six months or longer.
More than 50 percent of major manufacturers said they would procure more materials and parts from overseas to cope with the superstrong yen. This likely would deal a blow to domestic small and midsize manufacturers who have business relationships with them.
Twelve percent of major manufacturers said their profit would increase because the yen's appreciation would push down procurement costs of raw materials.
Meanwhile, 18 percent of major manufacturers said China, South Korea and other countries had approached them to lure them to their countries. Those countries are believed to have presented favorable conditions, such as tax breaks, subsidies and exemption from electricity charges.
Among measures to deal with the surging yen, 87 percent of major manufacturers said they want the government to lower the effective corporate tax rate, which is higher than those of other countries.
Sixty-three percent want the government to continually intervene in foreign exchange markets, while 58 percent want it to promote economic partnerships, such as the Trans-Pacific Partnership (TPP) free trade agreement.