BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

Plaza AccordPhoto: AP/Aflo3 Strong Yen Due to the Plaza AccordIn September 1985, at the G5 Summit held at the Plaza Hotel in New York City (ameeting of the finance ministers and central bank governors of the U.S., the U.K.,West Germany, France, and Japan), a coordinated devaluation of the U.S., dollarwas given international approval, which led to an especially strong yen. In whatbecame known as the Plaza Accord, the joint declaration stated,“A certain amountof orderly appreciation of the dollar against the major non-dollar currencies isdesirable.”This showed that the dissatisfaction with Japan, which continued torecord a large trade surplus with the U.S. had reached its peak. The Plaza Accordcaused a decline in Japan’s business performance, particularly for companies thatexported products such as automobiles and electrical appliances, and as Japanesedomestic demand expanded, Japanese companies accelerated local production atexport destinations.4 The General Trading Company in a Period of Stable GrowthAs Japan’s economic situation transitioned from postwar recovery through aperiod of rapid economic growth to one of stable growth, the function of Japan’sgeneral trading companies changed as well. During the postwar recovery, theysupported daily life and industry by securing and distributing household andindustrial goods. During the era of rapid economic growth, trading companies,and especially general trading companies, aimed to expand their businessoperations through the development and import of resources, the export of plantand equipment, and the development of downstream businesses. However, duringthe period of slow growth brought by the Nixon shock and the oil crises and amidthe subsequent period of stable growth. The Japanese Trading Companies weresuddenly plagued by sluggish business performance. During the oil crises, generaltrading companies were accused of causing skyrocketing prices by trying to cornerthe market on household goods, and the period was called the General TradingCompany Depression.After that, general trading companies struggled with an appreciated yen,low crude oil prices, and a decline in domestic demand and they began to shiftfrom sales-focused to profit-focused business models. Steadily, their businessperformance recovered through overseas investment, expansion of offshoretrading, and international finance initiatives.50