Jiji Press TOKYO (Jiji Press) — Japanese exporters are becoming more nervous about a stronger yen, which makes the business environment uncertain at a time when they already face many risk factors such as U.S.-China trade tensions.
Foreign exchange rates are a major matter of uncertainty, said Toshiaki Okada, executive vice president at Subaru Corp. “A stronger yen will cut into our profits,” he said.
The automaker has set its assumed exchange rate at ¥110 to the dollar for the business year ending in March 2020. But the U.S. currency fell below ¥106 for the first time in about seven months in Tokyo trading on Monday.
The firm’s operating profit will shrink by some ¥10 billion a year if the yen strengthens by ¥1 against the dollar.
On Friday, Toyota Motor Corp. said that it has cut its group earnings projections for the year ending next March due to the yen’s strength.
The automaker’s operating profit will fall by about ¥40 billion if the yen rises by ¥1 against the U.S. currency.
In such a case, rival Nissan Motor Co.’s profit will drop by ¥11 billion and electronics firm Hitachi Ltd. will see a drop of ¥14 billion in sales.