Yen Surges Against Dollar After FX Action

The yen traded between 153 and 154 per dollar on 11 September 2026. That move followed a coordinated currency intervention by Japan and the United States in late July. The Japanese currency has strengthened by about 10 yen since that intervention, after trading around 160 per dollar when April to June earnings season began.

The advance brought the currency past the budget forecasts of major domestic companies. According to Quick, out of 360 large corporations reporting projected exchange rates for the fiscal year ending in March, 150 had budgeted the yen between 155 and 159 per dollar. Another 35 companies planned on a range between 160 and 164 yen.

For manufacturers, currency effects accounted for about 90% of the 779.8 billion yen year-on-year increase in operating profit during the April to June quarter across 20 major firms in automotive, precision equipment, electrical machinery, and heavy industry. In August, Toyota set its projected exchange rate at 160 yen per dollar, a revision 10 yen weaker than its previous estimate. Toyota projects that each 1 yen gain against the dollar cuts annual group operating profit by about 50 billion yen ($324 million). Hitachi, Fujifilm, Seiko Epson, and Honda also adjusted their forecasts.

Currency weakness supported other exporters during the April to June quarter. Electronic components maker TDK saw the weak yen add 11.3 billion yen to its 29.8 billion yen operating profit growth, with over 90% of its sales generated overseas. Mazda and Mitsubishi would have both posted operating losses in that period without the benefit of the weak currency. Mazda executive Tetsuya Fujimoto noted at an earnings presentation that the company advanced structural reforms and cost reductions to build resilience against currency moves.

Kenji Abe, chief strategist at Daiwa Securities, calculates that total pre-tax profit for listed companies declines by about 0.3% for every 1 yen gain against the dollar, or 0.4% when including the yen-euro rate. Conversely, a stronger yen lowers import costs for fuel, raw materials, and food, benefiting domestic-focused firms like Nitori Holdings. For the fiscal year ending in March 2027, total net profit for companies on the Tokyo Stock Exchange Prime market is forecast to grow over 10%, supported by semiconductor and data center demand. Shingo Ide, chief equity strategist at NLI Research Institute, stated that manufacturing can withstand up to 150 yen per dollar, but moves past that level would hurt broader results despite semiconductor growth.