Markets

Strength of yen weighs on Toyota

Japan's strong monetary unit and inclement weather in Thailand prompted Toyota ( TM ) to cut its outlook for profit by more than 50 percent, according to The Wall Street Journal.

The setback comes as the carmaker was working on recovering production from the March 11 earthquake and tsunami. The world's reserve currency has dropped to all-time lows against the Pacific Rim nation's monetary unit while flooding harmed vital suppliers to Toyota in Thailand. Chief Financial Officer Satoshi Ozawa told the publication that offshore locations are used due to the strong value of the yen.

"The fact that production of some electronic parts has been offshored [to Thailand] signals how the destruction of Japan's industrial base is proceeding apace. I find that very shocking," Ozawa told The Journal.

Vulnerabilities of the U.S. dollar and the shared currency of the European Union to the yen have slashed price competitiveness of Japan, whose economy is based on exports of automobiles and electronic devices.

Reuters reports the economy of Japan, recognized as the globe's third-largest economic system, developed a little more slowly that forecast during the third quarter.

From July to September, gross domestic product increased 1.4 percent as compared to the second quarter. Preliminary projections stated a 1.5 percent gain while the median forecast was revised for 1.3 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.