A recent yen rally prompted a sell-off in Tokyo on Monday, but market
participants see limited near-term earnings risk. A Bank of Japan survey of more
than 800 firms found a weighted average USD/JPY assumption of 151.49; spot
USD/JPY remains roughly 5 yen away from that level, providing a buffer against
further yen appreciation. Daiwa Securities chief strategist Yugo Tsuboi said
earnings downgrade risk should be small unless USD/JPY moves close to the 150
area, and that current yen strength alone does not appear sufficient to impair
corporate profits.
