The dollar's sharp dive to a 12-year low against the yen Thursday raises the specter of reduced profits among major export-driven manufacturers in Japan, including Toyota Motor Corp. and Sony Corp., analysts say.
This outlook casts a shadow over the economy as a whole, already bracing for fallout from the strained U.S. credit market and economic slowdown, which could send the dollar down further.
It's no secret that the yen's rise is eroding gains from cost cuts at Toyota, the world's second-largest automaker. Every yen the Japanese currency gains on the dollar cuts Toyota's annual operating profit by ¥35 billion, according to the automaker.
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