*Note: This is a provisional translation for reference purposes only.
Tuesday, October 18, 2022
Press Conference Room, METI Main Building
Sakhalin-1Q: I would like to ask about Sakhalin-1.
Russia established the new company on the 14th, and SODECO must decide whether it will take part in it and send a notification within a month. Please tell us how the government will respond, and whether SODECO will maintain its interests.
A: I am aware that the new company was established on the 14th. As you pointed out, SODECO needs to decide within a month whether or not it will take part.
We are reconfirming the details and conditions decided by the Russian government. I will refrain from making any comments on our future measures based on assumptions. However, as I have already said, Sakhalin-1 is a very important project. We will continue to closely consult with SODECO's private shareholders and other relevant parties and consider specific measures.
Measures against the depreciation of the yen
Q: I have a question about the depreciation of the yen. The yen is steadily being depreciated, and the exchange rate temporarily exceeded 149 yen to the dollar on the 17th. Please tell us what impact it will have on the domestic industrial sector and what kind of support METI will implement.A: I will refrain from commenting on the exchange rate. However, there is an upside and downside to the depreciation of the yen. The downside is that the prices of various commodities, energy and electricity have increased, and we will address them carefully in our economic measures, including a response to electricity prices.
On the other hand, the upside is that, as discussed yesterday, this is a very good environment for those who wish to export, and a great opportunity for SMEs, not to mention large corporations. The same goes for those in primary industries. It is also an opportunity for those in agriculture and fisheries. We will provide support for those who do not know how to export their products through JETRO and other relevant institutions. This is the first point.
Second, the other day, I visited JASM’s construction site where TSMC is investing, and this is truly an opportunity for overseas companies to invest in Japan.
Third, it is METI's policy to reactivate nuclear power plants if they are confirmed to be safe and comply with the Nuclear Regulation Authority's standards, while gaining the understanding of the local community. The power gained from activating one nuclear plant is equivalent to one million tons of LNG, and we will not need to buy that portion from overseas when the situation is critical in Europe and gas prices are increasing in the market.
Promoting exports and investments and reactivating nuclear power plants will have the effect of cushioning the depreciation of the yen. In other words, if exports or investments increase, and LNG imports decrease, that will improve the trade balance, cushion the depreciation of the yen, and even cause the yen to appreciate. In a sense, using the upside of the depreciation of the yen to reinvigorate the economy will cushion the depreciation. So, we will try to encourage exports and attract domestic investments in our economic measures. We have confirmed our policy to reactivate nuclear power plants while prioritizing safety above all else and gaining the understanding of the local community. I think this will also counter the depreciation of the yen.