One argument against the negative bias (for Japanese companies) of a strong yen goes something like this: a stronger yen reduces the impact of high commodity prices, such as oil, which particularly helps the likes of consumers and smaller companies. I said as much, stating the obvious, last November (see here). At that time, Chief Cabinet Sec Machimura commented that it is “wrong to think that a high yen is something bad for the Japanese economy.”

That was then, when the yen was safely above ¥100/$1. Now, at ¥99, there’s the reality that corporate profits aren’t going to come in — just consider all the ¥110+ corporate forecasts. continue reading…