Yen Depreciation Drives Japanese Multinationals to Collectively Raise Earnings Forecasts
Claire Weston
86% of forecast revisions among TOPIX constituents have been upward — the highest ratio since FY2016. A weak yen is boosting export-heavy profits, but import-dependent firms face mounting cost pressure.
What does an 86% upgrade ratio tell us?
Okasan Securities counted 159 upward revisions versus just 12 downward among roughly 1,600 TOPIX constituents since July 1.
Upgrades cluster in electrical equipment, machinery, chemicals, shipping and wholesale trade — all export-oriented sectors.
This means → the weak yen is not a company-specific tailwind; it is a system-wide earnings lift for Japan's export bloc.
How are automakers pricing in the weaker yen?
Toyota raised its assumed rate from ¥150 to ¥160 per dollar, adding an estimated ¥480 billion (≈$3 billion) to its operating-profit forecast for the fiscal year through March 2027.
Honda moved from a conservative ¥145 to ¥155, projecting a ¥170 billion profit boost. CFO Masao Kawaguchi cautioned that Honda also pays many U.S. suppliers in dollars: "Some aspects are favorable, some are not."
Nissan kept its assumption at ¥150 but CFO George Leondis noted "there could be some upside on the FX side" if the yen stays near current levels.
In plain terms = when automakers raise their FX assumptions, they are writing "found money" into the official forecast.
Consumer and retail — same yen, opposite fortunes?
Sony raised its full-year operating-profit outlook, citing yen weakness and U.S. tariff refunds.
Ryohin Keikaku (parent of MUJI) lifted its net-profit forecast by 32%; CEO Satoshi Shimizu said "FX effects and stronger-than-expected overseas performance raise the likelihood of global growth."
Fast Retailing (Uniqlo parent) told a different story. CFO Ken Okazaki was blunt: "We import products and sell them in the market. The impact of the weak yen on us is of course significant … the situation is becoming increasingly challenging."
This means → within the same consumer sector, those who earn foreign currency gain; those who spend it lose — the weak yen is deepening the divide.
How unified is the corporate bet on a weak yen?
By August 7 the median assumed USD/JPY rate among TOPIX constituents had risen from 150 in late May to 153.73.
This reflects a broad corporate consensus that yen weakness will persist, not just a short-term swing.
The yen hit a near-40-year low of roughly 164 last month; joint intervention by Japanese and U.S. authorities pushed it back to around 155 — still above most companies' central assumption.
How long can the yen-depreciation dividend last?
T. Rowe Price portfolio specialist Daniel Hurley notes that Japanese firms have shifted more production offshore and retain a larger share of profits abroad, making them structurally less sensitive to yen weakness than in the past.
He sees the yen's weakness rooted in "Japan's deeply negative real interest rates"; currency intervention "may slow or smooth the depreciation, but cannot sustainably reverse it."
Hurley expects the yen to "gradually and sometimes choppily appreciate" as the rate gap narrows, but a rapid rebound is unlikely while U.S. Treasury yields stay elevated.
In plain terms = as long as the yen avoids a sharp rally, export firms keep their FX windfall — but import-dependent companies see no near-term cost relief either.
Content is for reference only, not financial advice.