Bandar Seri Begawan - As World currencies face turbulent times and as the Japanese yen continues to soar, Brunei's car industry faces a bumpy ride according to industry sources.

The sale of Japanese cars, which constitute 80 per cent of vehicles sold in Brunei, has slumped by 10 per cent this year, raising fears among the local motor industry of more troubles ahead.

And further uncertain times may be in store here for car traders as the yen takes a roller coaster ride in foreign exchange dealings and Japan-made cars and other consumer goods get out of reach of the local people.

Some analysts expect the yen to continue to gain strength against the US dollar. It could threaten its strongest level around 80 yen like in April 1995.

Earlier the Group of Seven (G7) industrialised nations issued a statement warning that the strength of the yen was a threat to economic stability.

This statement was taken as a warning of coordinated action to reduce the value of the currency.

The yen has been strengthening as a result of the end of the "carry trade" in which traders borrowed the Japanese currency almost at zero per cent interest and used it to buy currencies with higher interest rates.

But now the difference between Japanese rates and that of elsewhere in the world has fallen, traders have been unwinding the carry trade, which means they have been using other currencies to buy yen, which has boosted the Japanese yen, a BBC report says.

As the US dollar fell below 85 yen early Friday for the first time since July 1995 Japan's Finance Minister has hinted strong action to bring the yen down as it threatened its export industry on which its economic well-being depends.

Finance Minister Hirohisa Fujii said on Friday that recent foreign exchange rate moves were clearly one-sided.

"If this kind of situation is sustained, I think that it would be something abnormal," Mr Fujii said at a press conference.

"It would be possible for us to take" steps under such conditions, he added.

Meanwhile in Brunei Toyota cars marketed by NBT remained king of the road maintaining its previous year's sales although there has been a 10 percent overall drop in overall sales for the whole industry which up to last month totaled 10,499 vehicles.

Toyota was able to maintain its sales because its Japan make was supported by cars made in Thailand and Indonesia.

Toyota sales reached 3,161 vehicles up to last month while Suzuki sold 1,009 vehicles, Hyundai 842 and Mitsubishi 794 cars, according to Brunei Automobile Association figures.

Of European luxury cars Mercedes maintained the lead here with 228 vehicles and BMW 192 cars. -- Reported by Brudirect.Com

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