A recent surge in the Japanese yen sparked a sell-off in Japanese equities on Monday, according to a report cited by ChainCatcher from Jin10. Even so, analysts said the threat to corporate earnings remains manageable for now.
A Bank of Japan survey showed that companies are using a weighted average USD/JPY assumption of 151.49. The current exchange rate still sits about 5 yen away from that level, leaving some room before exchange-rate moves become a bigger problem for earnings.
Yugo Tsuboi, chief strategist at Daiwa Securities, said the risk of earnings downgrades should remain small unless the yen strengthens further against the U.S. dollar to a level close to 150. The comments suggest that while foreign-exchange moves have started to weigh on market sentiment, analysts do not yet see a broad hit to profit forecasts under current conditions.
A sharp rise in the Japanese yen triggered a sell-off in Japanese stocks on Monday, according to Jin10 as cited by ChainCatcher, though analysts said the risk to corporate earnings remains contained.
A Bank of Japan survey showed companies are using a weighted average USD/JPY assumption of 151.49. The current exchange rate is still about 5 yen away from that level.
Yugo Tsuboi, chief strategist at Daiwa Securities, said the risk of earnings downgrades should stay small unless the yen strengthens further against the dollar to a level close to 150.
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