Investors Rethink Japanese Multinationals Amid Yen Strength

The strengthening yen is prompting investors to reassess the prospects of Japanese multinational companies, which had previously benefited from a weaker currency.

Sony, for example, is facing challenges as the yen trades around 147 to the dollar, up from 38-year lows near 162 earlier in July.

Despite this, Sony’s shares rose by 8.5% in morning trading on Tuesday, buoyed by a larger profit from its games business despite a drop in PlayStation 5 sales.

Sony’s forecast for selling 18 million PS5 units this fiscal year, down from 20.8 million last year, highlights the struggles within the gaming industry, which faces rising costs and limited pricing power. Additionally, the recent workforce reduction at Sony-owned Bungie, which cut nearly 20% of its staff, reflects broader industry challenges.

Sony’s stock closed flat ahead of earnings reports and is down 8% year-to-date, placing the company’s market capitalization at just over $100 billion.

Reuters