Japanese investment in China down on declining yen, rising labor costs

Japanese companies operating in China are suffering from the combination of a declining yen and increased labor costs, The Wall Street Journal reported. The yen has declined more than 30% against the yuan over the past three years, and has accelerated in recent months. Meanwhile, labor costs in China have nearly doubled over the last five years, a combination that has left Japanese companies who manufacture products in China and sell them for yen in Japan in rough shape. This has contributed to a 4.3% decline in Japanese direct investments in the first eight months of this year from a year ealier, though this decline has been exacerbated by political tensions and anti-Japanese sentiment in China.