Strong yen favours Korea - Sony
October 8, 2009
By Kevin Cho and Mariko Yasu Tokyo
The yen might strengthen, Sony said yesterday, threatening to push Japanese electronics makers further behind South Korean competitors such as Samsung Electronics.
Combined with falling television prices and a weak US economy, Japan's biggest exporter of televisions "has no moment to breathe", Sony vice-chairman Ryoji Chubachi said.
By comparison, Samsung reported that operating profit more than doubled last quarter and analysts estimated the company's net income climbed to a record high.
The yen's gain against the South Korean won in the past year has given Samsung and LG Electronics room to slash more than $100 (R745) off a $1 000 television set without trailing Sony and Panasonic in terms of profitability.
For Japanese companies, "it's like a death warrant as things stand now and if this continues, they will have a very difficult time", said Chu Moon Sung, a fund manager at Shinhan BNP Paribas Asset Management in Seoul. "For Korean companies, it's a favourable environment and the currency has been the biggest factor."
The dollar is at its weakest levels against the yen since February, trading at as low as 16588.86 yesterday. - Bloomberg
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