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yen weakness-corporate outlook

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(Globalpost/GlobalPost)

SEOUL, April 1 (Yonhap) -- Japanese companies are expected to post outstanding results this year on the back of the yen's fast descent, while Korean firms will likely suffer from the currency devaluation, data showed Monday.

The earnings-per-share (EPS) outlook of the Morgan Stanley Capital International (MSCI) Japan Index stood at 45.02 as of March 20, up 14.7 percent from the end of last year, according to the data compiled by KDB Daewoo Securities Co.

But the figure for Korea has only risen 0.1 percent to 66.93 since December, the data showed.

Compared with September in 2012, when the Japanese government began its aggressive monetary policy, the figure for Tokyo jumped 13.1 percent.

It is the first time since October in 2008 that the EPS outlook on Asia's second-largest economy surpassed the 45 mark, as the country had been suffering from decades of deflation, the brokerage firm said.

Such a big gap on the corporate outlook for the two countries came as Japanese firms are forecast to see their profits surge on the fall of its currency, as Japanese Prime Minister Shinzo Abe has pushed for an expansionary monetary policy to boost the economy.

The yen has plunged 21.1 percent against the U.S. dollar in the last six months, changing hands at 94.17 yen per dollar as of March 29.

The depreciation of the yen makes Japanese products cheaper than rivals' in the global market, which means Korean firms will most likely be hurt by the yen weakness as many of them compete with Japanese companies.

In the last six months, the Tokyo stock market skyrocketed nearly 40 percent, whereas the Seoul bourse added 0.43 percent, the data showed.

"The Japanese currency is predicted to fall further to 97 yen per dollar this year, possibly continuing its losing streak till early next year," said Lee Yoon-hak, an analyst at Woori Investment

http://www.globalpost.com/dispatch/news/yonhap-news-agency/130331/yen-weakness-corporate-outlook