South Korea’s product innovation and the rise of the nation’s global brands such as Samsung Electronics Co. have helped it to outperform Japan on exports even after the yen’s slide.
The CHART OF THE DAY tracks exports of South Korea and Japan using volume-based indexes, as Samsung and Hyundai Motor Co. joust with the likes of Toyota Motor Corp. and Canon Inc. The lower panel compares the performances of the nations’ currencies using trade-weighted gauges compiled by Westpac Banking Corp.
While Prime Minister Shinzo Abe’s efforts to engineer a Japanese revival have driven down the yen, his nation’s export volumes have yet to pick up. Over the four years through February, they fell 3 percent, compared with South Korea’s 38 percent gain over a similar period.
“South Korea’s exports have become more branded and less commoditized,” said Wai Ho Leong, a senior regional economist at Barclays Plc in Singapore. “For instance, Samsung is increasingly seen as a lifestyle choice, which means demand is less sensitive to price swings.” In contrast, the analyst said, Japan has lost consumer “mind share.”
Japan said it shipped 6.39 trillion yen ($62 billion) of merchandise exports in March, compared with South Korea reporting $49.7 billion. While the won touched a five-year high against the dollar on April 10, the yen is down about 17 percent since Abe took office in 2012.