Japanese tourists might be digging out suitcases and planning overseas trips with glee, but an ever-climbing yen is putting the nation's largest exporters of cars, games, and even ships in slightly less joyful mood.
The yen has appreciated 8% against the U.S. dollar and 11% against the euro since the traditional start of the fiscal year for many Japanese companies of April 1. And while the reasons for its steady advance are myriad -- ranging from Britain's vote to leave the European Union to the Bank of Japan's monetary policies to the uncertainty in U.S. presidential elections -- the impact on the country's largest companies is easier to calculate.
Mazda (MZDAY) is the latest of the major Japanese exporters to downgrade earnings guidance due to greater-than-expected yen appreciation, as the automaker not only reported a 32% recurring profit decline for the first half of the year but also cut its full-year profit outlook by 12%. The maker of the Demio and CX-3 models essentially blamed the downgrade solely on an unexpectedly strong yen.
Nintendo (NTDOY) , which ignited the Pokemon Go fire this summer, also fell victim to the volatile currency. The Kyoto-based game developer, which generates more than 70% of its sales outside of Japan, slashed its full-year recurring profit forecast by 78% on Oct. 26, again pointing the finger at a greater-than-expected strength in the yen, alongside other factors.
Sony (SNE) was yet another player that recently downgraded its full-year outlook, as the Playstation maker cut its pretax profit guidance by 7.4% Monday, attributing the move both to forex and losses and the sale of its battery business.