Japanese automakers face dual headwinds: a stronger yen combined with Middle East conflicts may significantly squeeze profits

智通财经2026/08/17 05:46

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The yen's appreciation triggered by the Iran war is impacting Japanese automakers such as Toyota, Honda, and Nissan. Previously, the historically weak yen boosted these companies to raise performance expectations and improve profits, but the strengthening yen is reversing this advantage.
Morningstar analysts pointed out that the yen’s appreciation will force automakers to choose between raising prices in overseas markets or sacrificing profits. The former could lead to a decline in market share, while the latter would reduce the value of overseas profits when converted into yen. Bernstein estimates that for every 1% appreciation of the yen, the operating profit of Japanese automakers is typically affected by about 2%, with some companies seeing an impact as high as 4%.
Continuing conflicts in the Middle East will also drive up the cost of key raw materials such as naphtha, resin, aluminum, copper, steel, and chips, and increase shipping risks in the Strait of Hormuz and the Red Sea, further squeezing automakers’ profit margins.

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Japanese automakers face dual headwinds: a stronger yen combined with Middle East conflicts may significantly squeeze profits

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