Sharp currency movements are unsettling companies ahead of their earnings announcements. The yen strengthened following coordinated intervention at the end of July, moving about ¥10 against the dollar over the past month or so.
Wide swings in foreign exchange markets are affecting companies’ earnings outlooks. The yen strengthened following the joint Japan-US intervention at the end of July, with the yen’s exchange rate against the dollar moving about ¥10 higher over the past month or so. Some market participants believe there have been instances in which actual market movements have diverged from assumed rates.
Against the backdrop of the yen’s actual appreciation, the market is focused on the possibility of an impact on companies’ revenue recognition and cost calculations. Sharp currency movements are attracting attention as a factor that could unsettle views on earnings, and some observers have raised the possibility that companies, particularly larger ones, may revisit their outlooks.