Japan firms may re-shore production

GROWING confidence that the Japanese yen will remain at or below current competitive levels for a considerable time is triggering speculation that Japanese companies will increasingly invest at home, rather than abroad, and possibly even bring overseas production back onshore, in the future.

Such a change could lower the level of investment by Japanese firms in Asean and regions including China and India, if it were to become a general trend. China, especially, has expressed concerns that the re-shoring of production by Japanese or other firms, on grounds of relative costs, could become a problem.

Speculation has been fed by news that leading Japanese camera and copier maker Canon Inc intends to shift a certain amount of production back to Japan. Some industry experts predict that Canon could be first of a series of firms opting to re-shore production facilities back to Japan.