Yen rally and Iran war may hurt Japanese automakers
Japanese automakers such as Toyota, Honda, and Nissan may face challenges due to a potential yen rally and the ongoing Iran war.
The companies recently benefited from a weak yen, which made their exported vehicles cheaper and more competitive in global markets.
A strong yen would force automakers to decide between raising prices in foreign markets or having their operating profit pressured by a lower yen value of foreign profits.
A 1% change in the yen can affect Japanese automakers’ operating profit by roughly 2%, with some companies seeing a 4% impact.