Murata Manufacturing Co., the world's leading maker of ceramic capacitors, will scrap its plan to cut 3,000 temporary jobs in Japan despite opening factories overseas to combat the effects of the strong yen.

"By focusing on new products with high-end technologies, we can maintain both domestic output and our competitiveness," President Tsuneo Murata, 60, said this week in an interview. "I will try to keep our Japan workforce at its current level."

Murata's comments are a reversal from remarks made in September 2010, when he said the company, whose capacitors are used in flat-panel televisions and smartphones, would reduce the number of contract workers in Japan to about 1,500 to reach a target of 30 percent overseas production by March 2013. The opening of two factories in China earlier this year will allow the company to achieve its overseas goal, he said.

Another plant is set to start operations in the Philippines in 2013.

Murata, which has increased its profit in the past two fiscal years, in October forecast net income will fall 21 percent to ¥42 billion in the year ending March 31 amid Europe's debt crisis and slowing growth in Asia. It also reversed a forecast for an increase in revenue, and now expects the figure to decline 2.9 percent to ¥600 billion.

"The cost saving from moving production overseas is only temporary" said Murata, third-eldest son of Akira Murata, who founded the company in 1944. "The infrastructure in some of the countries we have entered is not as good as Japan's, so there should be cases where we're better off strengthening operations here rather than looking abroad."