Hitachi says rapid rise in yen should be managed

Published 09/13/2010, 06:03 AM
Updated 09/13/2010, 06:08 AM

* Strong yen hurts in short term - Hitachi president

* Rapid moves in yen should be managed - pres

* Govt support important to win more power deals overseas

TOKYO, Sept 13 (Reuters) - The head of Hitachi Ltd, Japan's biggest electronics conglomerate, said on Monday that a rapid rise in the yen would weigh on the company and the government should manage such moves.

"In the short-term, the high yen rate is a kind of big pressure," he told reporters in Tokyo, adding that Hitachi can handle a gradual change in exchange rates but that rapid fluctuations could hurt its profitability.

Asked whether Japan should intervene in currency markets, he said: "Rapid changes should be managed."

Nakanishi, speaking in English, said Hitachi has made various efforts to lower the impact from the strong yen, which on Monday remained near a 15-year high hit last week. These include shifting manufacturing sites to China from Japan.

On the flip side, he said the yen's strength offers preferable conditions for the acquisition of overseas companies, although he added Hitachi would not decide to buy firms simply based on price.

Hitachi in July posted a first-quarter profit that beat expectations on brisk demand for electronic and auto parts, and hiked its half-year forecast by 36 percent.

But it left its conservative full-year guidance untouched, saying the outlook is too murky.

As Hitachi aims for its first annual net profit in five years and to better compete with the likes of Siemens and General Electric, it is boosting investment in infrastructure-related areas such as power, industrial and IT systems, where it can tap its network of 900 group firms.

Nakanishi stressed the importance of government backing for Hitachi's overseas nuclear power business, including financial support, to boost its competitiveness. (Reporting by Sachi Izumi and Antoni Slodkowski; Editing by Joseph Radford)

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