Facing an appreciating yen in recent years, Japanese exporters have realized that it makes their goods more costly and less competitive in foreign markets. How can they protect their profits? By moving production to the United States and other nations and decreasing the amount of money they convert from dollars to yen.
During 2010-2011, Japanese businesses ranging from automakers to electronics companies were transferring more of their manufacturing abroad, because the appreciating yen fostered a major restructuring of Japan's economy. Toyota Motor Corp. produced about 57 percent of its output abroad during this period, up from 48 percent in 2005. The world's leading auto manufacturer said it would begin producing its popular Prius at a plant near Bangkok, making it the first time its flagship hybrid would be mass produced outside Japan. Also, rival Nissan Motor Co. manufactured about 71 percent of its cars abroad in 2010-2011, compared with 66 percent in 2009. Japanese business leaders said their companies had to adapt to the rising yen by sourcing more and more products outside Japan in order to compete.
Moving production to the United States and other countries can help Japanese producers escape much of the dollar/yen problem and sell their products to foreigners. This production move contributes to the excess capacity of manufacturing plants in Japan and results in job losses for Japanese workers. A continually strong yen can promote a hollowing out of Japan's economy as some have feared.

What do you think? How can moving production to the United States help Japanese producers avoid the problem of an appreciation of the yen?