Over the years, American’s have really gotten a “thirst” for Japanese products. Who hasn’t come in contact with Toyota (TM), Sony (SNE), Nissan (OTCPK:NSANY), Mazda (OTCPK:MZDAF), Panasonic (PC), Fujitsu (OTCPK:FJTSY), Casio (OTCPK:CSIOY), Toshiba (OTCPK:TOSBF) or Nintendo (OTCPK:NTDOY)?
We use their cars, their electronics and don’t forget….their Wii’s. They’ve really seemed to get a feel for what we like…actually much better than many American companies. Americans have “voted” with their dollars as they’ve increasingly bought up Japanese goods (especially their cars and electronics) and as a result it’s given these companies an “ever-increasing” market share against many of its American competitors.
However, these companies have had a “thorn in their side” over the past five months that is really “throwing a wrench” in things. What is it? Their own currency, the yen.
Take a look at the chart of the USD/JPY exchange rate. The yen has become so strong against the dollar that it’s driven that exchange rate down a full 21% in just 5 short months. That’s like a year or two’s worth of “typical moves” all within five short months.
The Yen Dominated Everything in 2008 and that Strength Continues Even Now!
How bad is it hurting them? Let’s take a look.
Toyota is going to have its first loss in 71 years and it’s closing many plants for 11 days in light of the recession and strong yen. Meanwhile, Honda (HMC) had its credit rating cut by Fitch from A+ to A.
Sony is having its first loss in 14 years. In fact, it’s cutting 16,000 jobs because it’s been so bad. How bad? Well, analysts were expecting a profit of 35 billion yen…instead, they may report a 100 billion yen loss. Ouch! Toshiba is also taking its first loss in 7 years.
Nintendo can’t even gain any
