In the event that the Japanese yen gains in value, the effects are overwhelming on the Sony Corporation. The biggest blow will be the loss in value of the company in terms of financial assets translated from the US dollar and euro to the Japanese yen. A strong Japanese yen means a weaker dollar, and the effects of the former are of more economic disadvantages to the Sony Corporation. This would mean low manufacturing volumes entirely not only by the Sony Corporation but in all other industries. This, therefore, translates to low exports and a reduction in supply purchases. This will ultimately have a drastic effect on the economy as it also leads to loss of jobs and crumple employment. A weak yen in Japan is an incentive for exportation, while a strong yen is bad for export traders such as the Sony Company.
With a weak yen, investors benefit from export-related shares in trade, with the vice-versa being true. During the recess period, the Japanese yen gain in value against the US dollar led to reduced export volumes which ultimately led to very low sales. These effects, combined with the already happening recession, had a negative effect on the financial base for the company. The fall of the Japanese yen led to a fall in Asia’s trading deficit as Japan acts as the capital for the financial market in Asia as opposed to being the end market for Asian products. Sony competes with other electronics companies in Asia. For its survival in the market, a weaker yen is better than a strong yen. With a weak yen, Sony Corporation in Japan is able to place its products at cheaper rates in the big markets such as Europe and the United States of America. This would give the company an upper hand in the region, maximizing its profit margins.