I know there is no magic ball to tell us this, but what would the expected impact of a strengthening yen on major international Japanese company stock prices in yen. Your Toyota, Takeda, Sony, Nissan, etc. Companies with the majority of their business done outside of Japan. These companies are also traded on the NYSE, so that must impact things...
I feel like the US Dollar value will stay the same, so a strengthening yen will cause Yen price to go down on the Tokyo Stock Exchange...
Is that crazy?
International 'local' stocks - Yen strengthening impact
Re: International 'local' stocks - Yen strengthening impact
The effect of exchange rate changes is complicated because the companies are dealing with expenses as well as income in various currencies. I work in international pharmaceuticals and almost all of our expenses for clinical development are denominated in US dollars because of how the industry serving clinical development across multiple countries insists on functioning in dollars. In addition, the pharma industry largely moved manufacturing outside Japan. For those reasons when the yen falls the net effect for us is often a decline in profits, even though the sales figure is boosted by a fall in the yen. A company like Toyota also will have a lot of costs based in US dollars because car companies need to have local manufacturing in major markets like the US to avoid political trade friction.
That is why I don't think you should approach this as having the stock price in dollars stay the same while the stock price in yen falls. Depending on the company, the exchange change has a real impact on bottom line profits and the direction can be different by company and by industry.
That is why I don't think you should approach this as having the stock price in dollars stay the same while the stock price in yen falls. Depending on the company, the exchange change has a real impact on bottom line profits and the direction can be different by company and by industry.