Japan Beefs up Trade Insurance Cover for Exporters?
Japan’s government- backed Nippon Export and Investment Insurance will triple the maximum amount covered under its trade policies to 30bn yen (JPY), equivalent to US$290m, beginning from next month.
The move is in response to many Japanese companies stepping up their presence in the emerging markets (EMS) of the Middle East and Asia. The public insurer will assist them in building up their exports of ‘big ticket’ items such as cars and electronic goods.
Nippon Export rates foreign firms buying Japanese goods on a scale of 1 to 4 based on their finances, with coverage granted on exports to those qualifying for the top three ratings.
Insurance payments on major firms in the top two categories will rise from the current JPY10bn to JPY30bn in April. Exports to small and medium-sized firms that qualify for the third category will double from JPY5bn to JPY10bn.
Overseas firms that import Japanese cars typically buy from several motor manufacturers. under the new system, the maximum coverage for Japanese carmakers exporting to the same overseas buyer will be capped at a maximum JPY30bn.