Terrie Lloyd with thoughts on the dollar

March 22, 2007
By Ken Worsley

With yesterday being a national holiday in Japan, market news hasn’t quite cranked up again yet. This morning we came across this piece by Terrie Lloyd, which seems to fit in with the recent discussion over where the dollar/yen rate is headed:

One short quote:

So, while the government seems quite sanguine about its massive exposure to a fall in the dollar, Japanese firms are being much more pragmatic. The Nikkei recently ran a good article about how firms are expecting a stronger yen going forward and are planning for an exchange rate of at least 110 yen to the dollar, if not even 105 yen. The traditional route is to hedge one’s foreign funds, but this is only a short-term measure and isn’t much good during a sustained period of volatility or correction. As many major Japanese manufacturers start to see more of their profits earned overseas than here in Japan, such as is now the case with Toyota, Nissan, and Honda — indeed, 84% of Honda’s sales came from abroad last fiscal year — then they need to get more sophisticated in handling their yen exposures.

I’ll let Terrie speak for himself…

Filed Under Exchange Rates, Finance