Japan Looks To Use Crude Prices To Their Advantage

Falling oil prices have wreaked havoc on producing nations like Russia and Nigeria, but importing nation Japan has seen crude’s recent slide as an opportunity to boost sales and get its economy back on track. Three such sectors are explored below.

Related Link: Japan's Improving Economy Shows That Inflation Is No Longer An Enemy

Auto Industry

Japanese auto maker Toyota Motor Corp (ADR) TM had a record breaking year in 2014 and is expecting the bright spot to continue through 2015.

While lower oil prices have helped automakers across the board, other Japanese firms that depend on oil to manufacture their products are also seeing a lift.

Manufacturing

Manufacturers like Kawasaki Heavy Industries Ltd (ADR) KWHIY also stand to benefit as the weak oil prices have balanced out the effect a weaker yen has had on the cost of imports. With the yen down around 118, the cost to import raw materials for manufacturing has skyrocketed, but deteriorating oil prices help offset some of those costs.

Retail

Retailers like Kao Corporation are also looking to gain as companies’ savings are passed on to employees. Prime Minister Shinzo Abe has been calling for Japanese firms to raise wages, something he says is essential to spur on consumer spending.

Related Link: Shinzo Abe To Delay Sales Tax Increase In Japan

In addition to savings from reduced crude import prices, Japanese firms are set to receive a corporate tax reduction in the coming months, something Abe has urged companies to pass on to their employees. On Tuesday, Abe told the nation’s businesses that if they used the cuts for the benefit of their work force, more tax breaks could be on their way.