Toyota seen worst hit among exporters by dollar drop

TOKYO (Reuters) - Toyota Motor Corp 7203.T looks set to be hit the hardest among Japanese exporters by the dollar's tumble against the yen, having assumed what now appear to be the riskiest currency rates for the rest of its business year.

Toyota, the world's biggest automaker, has assumed an average dollar rate of 90 yen for the October-March second half, compared with 85 yen at Honda Motor 7267.T and Nissan Motor 7201.T.

On Thursday, the dollar sank to a 14-year low of 86.29 yen, with exporters getting no reassurance from Japanese authorities, who repeated they had no plans to intervene to prop up the dollar.

While the euro's relative firmness presented some relief, shares in exporters fell across the board to push the main Nikkei average .N225 down 0.6 percent to a four-month closing low.

Toyota lost 1.2 percent, slightly more than falls of 1.1 percent in Honda and 0.5 percent in Nissan, but better than Mazda Motor Corp 7261.T, which fell 2.1 percent. The transport sector subindex .ITEQP.T lost 1.2 percent.

“Carmakers that issued big profit warnings last year have set cautious forex assumptions this time, so roughly speaking the current rates are within expectations,” Aizawa Securities auto analyst Toshiro Yoshinaga said.

“But there are views that the dollar could sink even further in 2010, to the 70s (yen), and in that sense Honda and Nissan, which are relatively strong in emerging markets, are in the winning camp,” he said.

Toyota, which exported just over half of its Japan-made vehicles in the first nine months of this year, estimates that every 1-yen fall in the dollar would shave 30 billion yen of operating profit. Toyota is projecting an operating loss of 350 billion yen in the year to March.

Electronics makers face similar difficulties, although analysts said current rates were still relatively manageable thanks to a resilient euro, now trading around 131 yen.

“I don’t think there’s too much to worry about,” said JPMorgan Securities analyst Yoshiharu Izumi. “Even with Sony, (which has a big forex exposure), they have some cushion left in the euro rate. I think they’ll be okay at these levels.”

Sony Corp 6758.T, which makes about 70 percent of its revenues outside Japan, is assuming a dollar of 90 yen and euro of 130 yen for the second half.

Sony shares closed down 1.9 percent, while Panasonic Corp 6752.T, which made 47 percent of its first-half revenues abroad, lost 1.7 percent.

Following are companies’ currency assumptions for the second financial half-year, and the impact on annual operating earnings from every 1-yen change in the dollar:

AUTOS dollar euro op profit impact


Toyota 90 130 30 bln

Honda 85 125 12 bln

Nissan 85 130 11 bln

Suzuki Motor 7269.T 90 115 *4 bln

Mitsubishi Motors 7211. 88 130 400 mln

Fuji Heavy Industries 7270.T

88 130 2.5 bln

Mazda 88 130 2.3 bln

* Suzuki’s figure includes total impact of all currencies


Panasonic 90 115 N/A

Sony 90 130 1 bln

Sharp Corp 6753.T 90 125 1 bln

Hitachi Ltd 6501.T 90 125 *1.9 bln

Toshiba Corp 6502.T **95 115 no impact

Nintendo Co 7974.OS 90 130 N/A

* Hitachi’s figure is for the second half only

** Toshiba’s assumptions are for the full year

Additional reporting by Reiji Murai, Kentaro Hamada; Writing by Chang-Ran Kim; Editing by Joseph Radford