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Weak Dollar: As Yen Passes 85, Japanese Exporters Tremble (SNE)(TM)
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The Japanese government is getting nervous, by most accounts of the financial media. The yen as hit a level where Japan’s big exporters may post large earnings losses this year in the place of modest profits. According to Bloomberg, Japan’s financial minister pushed for an international response to the rising yen.
The most likely near-term victims of the yen’s current “value” are huge exporters like Toyota (NYSE:TM) and Sony (NYSE:SNE).
The companies already suffer from lackluster sales due to weak demand for their products in the large US and EU markets. Unless the economic recovery is unexpectedly robust, their sales are not likely to rise much in 2010. The status of the yen will exacerbate that.
The recovery in the Japanese auto and consumer electronics industry may be over before it really ever got started.
Douglas A. McIntyre
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