Yuanta foresees rising yen, falling EU sales

’BREXIT’FALLOUT:Consumers in the EU might become cautious about spending, while a stronger yen would hurt Taiwanese dealers of Japanese brands, analysts said

Taipei Times
Date: Jun 27, 2016
By: Ted Chen / Staff reporter

Taiwanese companies with high European sales contributions or earnings that are linked to the movement of the yen are expected to be most affected by the fallout from Britain’s vote to leave the EU, Yuanta Securities Investment Consulting Co (元大投顧) said.

“Brexit” has unleashed a new wave of uncertainty for global markets, leading to expectations of heightened foreign-exchange volatility as global funds take shelter in defensive options such as the yen and the US dollar, the brokerage said in a report on Friday.

A stronger yen is expected to bring increased cost constraints for Taiwanese dealers of, and suppliers to, Japanese brands, and local companies including Nissan Motor Co (裕隆日產) and Toyota and Lexus distributor Hotai Motor Co (和泰車) might be compelled to increase prices, which could hamper their sales, the report said.     [FULL  STORY]

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