What Happens
As the yen depreciates, the yen value of sales earned overseas tends to increase when converted back to yen, which is commonly viewed as a tailwind for companies with a high export ratio. On the other hand, for companies that import raw materials or energy from abroad, it is commonly viewed as a factor that tends to raise procurement costs.
How to Read It, and What to Watch Out For
The direction and size of the impact that yen depreciation has on corporate performance differ from company to company, depending on factors such as export ratio, the share of overseas production, and procurement structure. A weaker yen does not guarantee a rise in any individual company's stock price — it should be treated as just one factor that can affect performance.