Quote:
Originally Posted by Corey
You're right, the strengthening of the yen leading to Japan's inability to compete in the export market abroad is only of marginal importance. Tell the Japanese financial ministry that so they can stop worrying about the country's economic woes and get on with selling cars at a huge loss  |
Companies with large exports typically have pre-arranged long-term currency swap agreements with banks/financial sector. So short-term fluctuations in exchange rates don't matter. Over the long-term countries with consistently appreciating currency (if there was such a thing) would experience a slowdown in wage growth, negating the effect of nominal exchange rate. So yeah, exchange rate movements are secondary. Especially in business that's not labor intensive, such as car production.