FMI’s reviews of November U.S. Dollar and Trade Prices results and the latest Weekly UI Claims & Rail Traffic data.
FMI’s review of December U.S. Dollar and Trade Prices results.
Key points of this report, - The current profits of Japanese corporations have fallen in the last three quarters. For all corporations, current profits are down 16% from April-June 2015 - Among manufacturers, who are the biggest multinationals, profits are down a whopping 29% from three quarters ago to a level first reached 13 years ago in 2003 - In part, profits are down because sales have slumped, but an even bigger reason for the plunge in profits is that the ratio of profits-to-sales is down 13.5% from its peak in April-June 2015 - The roller coaster ride of the yen’s value has played a pivotal role in the roller coaster ride of profits; over the last five years, there has been a stunningly high 95% correlation between the profits:sales ratio and the value of the yen - Most of the impact of the ups and downs of the yen on profits is a pure accounting illusion, but one that, for a while, misled many foreign investors
TOE Alert: Growing Number of Currency Traders See Yen Going to Y95-110 Per Dollar; Abe Aide Says Delay Consumption Tax
Key points: - Abe Advisor Honda calls for postponement of consumption tax hike - Investment bankers increasingly see yen moving to ¥95-110/$ during 2016 - Even MOF intervention seen as creating only temporary interruption in yen rise - Separating out the fundamental and technical factors
FMI’s end-of-the-month summaries for the U.S. Dollar and International Economic Conditions.
FMI’s commentary on the likely (very modest) effects of the dollar’s recent appreciation.