he Japanese Yen will Fall in 2012, and Here’s How You Can Profit

Sean Hyman (February 29, 2012)Something is about to happen to the Japanese yen. This currency is on the move. As far as I’m concerned, there is a very definite way to profit from this move. But it’s truly amazing how much real-world effect a currency can have on a company’s profits and its employees. Currency is where the rubber meets the road. Here’s the clue to what’s happening with the yen… Toshihiro Nagahama, chief economist at Dai-Ichi Life Insurance Research Institute, recently noted: “No Japanese manufacturing company can make a profit at the yen’s current level around 75 to the dollar.” I agree with him. The current value of the yen is the number-one hindrance to Japanese corporate growth, and that has far-reaching implications. Why the Yen Must Fall If you want statistical proof, just look at how the chart below shows that when the yen goes up Japanese stocks go down. At the same time, when the yen heads higher against the dollar, Japanese goods become more expensive for Americans. And these goods are also expensive for Europeans with the EUR/JPY exchange rate so low. Americans and Europeans alike have backed off of buying Japan’s goods simply because the exchange rate has gotten way out of whack. The buck just doesn’t go as far as it used to in buying Japanese goods and neither does the euro. It’s taken a big toll on huge Japanese exporters, like Sony, Toshiba, Mazda and NEC. And if you think it’s not a…