Yen’s Rapid Advance Pressures Earnings Once Thought Easy to Beat
- Concerns of yen breaching 140 versus the dollar hurting stocks
- Japanese companies may need to revise down earnings guidance
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The yen’s recent rally has taken it past levels many Japanese companies use to forecast their earnings, raising the risk of exporters cutting their guidance and hampering the stock market recovery.
With stronger signals coming from the Bank of Japan and Federal Reserve on monetary policy, the yen has gained 3.5% against the dollar since the end of July, with some analysts now forecasting it to hit 135 by the end of the year.