Japanese automakers are getting much-needed cover from an old standby, as the weaker yen helps prop up profits amid declining sales in China and the increasingly tough shift to electric vehicles.
Toyota, Honda and Nissan recently reported earnings that topped analyst estimates by 6 percent to 21 percent in the three months through June, and all cited the currency as a factor.
“If the yen stays low, they clearly benefit but it doesn’t offset any other concerns,” said Satoru Aoyama, senior director at Fitch Ratings Japan.
“They are struggling in the Chinese market,” he said. “They just don’t have an immediate solution” for their problems there, he added.
Nissan late last month upgraded its full-year operating profit forecast, raising it by 30 billion yen ($208 million) to 550 billion yen. About 20 billion yen of that came from the currency, CFO Stephen Ma told a briefing.
A weak yen has traditionally lifted profits for Japan’s big exporters, although it is no longer as large a boon for automakers that have increased their overseas manufacturing in recent years.