{"id":48566,"date":"2023-08-15T07:42:37","date_gmt":"2023-08-15T11:42:37","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/weak-yen-gives-japans-automakers-temporary-relief-from-china-pain\/"},"modified":"2023-08-15T07:42:39","modified_gmt":"2023-08-15T11:42:39","slug":"weak-yen-gives-japans-automakers-temporary-relief-from-china-pain","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=48566","title":{"rendered":"Weak yen gives Japan’s automakers temporary relief from China pain"},"content":{"rendered":"
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\n<\/u>2\/2<\/span><\/p>\n

\u00a9 Reuters. FILE PHOTO: A Nissan Arizon concept is displayed at the Auto Shanghai show, in Shanghai, China April 18, 2023. REUTERS\/Aly Song\/File Photo<\/span>
\n<\/i>
\n2\/2<\/span><\/u>\n<\/div>\n

By Daniel Leussink<\/p>\n

TOKYO (Reuters) – Japanese automakers are getting much-needed cover from an old standby, as the weaker yen helps prop up profits amid declining sales in China and the increasingly tough shift to electric vehicles.<\/p>\n

Toyota, Honda and Nissan (OTC:) recently reported earnings that topped analyst estimates by 6% to 21% in the three months through June, and all cited the currency as a factor.<\/p>\n

“If the yen stays low, they clearly benefit but it doesn’t offset any other concerns,” said Satoru Aoyama, senior director at Fitch Ratings Japan.<\/p>\n

“They are struggling in the Chinese market,” he said. “They just don’t have an immediate solution” for their problems there, he added.<\/p>\n

Nissan late last month upgraded its full-year operating profit forecast, raising it by 30 billion yen ($208 million) to 550 billion yen. About 20 billion yen of that came from the currency, CFO Stephen Ma told a briefing.<\/p>\n

A weak yen has traditionally lifted profits for Japan’s big exporters, although it is no longer as large a boon for automakers that have increased their overseas manufacturing in recent years.<\/p>\n

Automakers’ shares are quick to react to swings in the yen, although the companies themselves tend to stick to conservative forecasts for the currency.<\/p>\n

For instance, Toyota has stuck to its forecast for an average exchange rate of 125 to the dollar this business year, a level not seen since April 2022, about a month after the U.S. Federal Reserve started raising interest rates. The yen was at 144 on Thursday.<\/p>\n

At smaller Subaru (OTC:), a move of one yen against the dollar has a 20 billion yen impact on operating profit, CFO Katsuyuki Mizuma said earlier this month.<\/p>\n

On Wednesday, a Honda official said its April-June operating profit came in tens of billions of yen higher than expected, with the weak yen accounting for about half of that.<\/p>\n

“The yen wasn’t only weak against the dollar, but also against other currencies, including in Asia and Europe, so that comes through as a profit,” the official said.<\/p>\n

CHINA STRUGGLE<\/p>\n

The yen’s cushion couldn’t come at a better time for Japanese automakers, which are struggling in China. The world’s largest auto market is increasingly being dominated by home-grown players. <\/p>\n

Nissan’s China sales to retail customers slumped 46% during the quarter and those of Honda were down 5%. <\/p>\n

Sales of Toyota, including of its Lexus luxury brand, rose over the period. For the first half of the calendar year, they declined almost 3%.<\/p>\n

Japanese automakers have also been slow to pivot to the growing global market for electric vehicles with competitive offerings.<\/p>\n

It is unclear how long the weak yen will last. Japan’s central bank recently tweaked its cap on bond yields, sparking expectations it could eventually exit the ultra-loose policy that has weighed on the currency.<\/p>\n

Influential former finance ministry official Eisuke Sakakibara told Reuters the yen could strengthen to 130 by the end of the year. <\/p>\n

Subaru has kept its forecast at 128 yen, CFO Mizuma said, citing the difficulty in predicting the currency.<\/p>\n

“We’re really closely watching exchange rates,” he said.<\/p>\n

($1 = 144.2400 yen) <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

2\/2 \u00a9 Reuters. FILE PHOTO: A Nissan Arizon concept is displayed at the Auto Shanghai show, in Shanghai, China April 18, 2023. REUTERS\/Aly Song\/File Photo 2\/2 By Daniel Leussink TOKYO (Reuters) – Japanese automakers are getting much-needed cover from an old standby, as the weaker yen helps prop up profits amid declining sales in China […]<\/p>\n","protected":false},"author":1,"featured_media":1680,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-48566","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nWeak yen gives Japan's automakers temporary relief from China pain | iFintechWorld<\/title>\n<meta name=\"description\" content=\"2\/2 \u00a9 Reuters. 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