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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: dwight vickers who wrote (22685)6/15/1998 2:50:00 PM
From: Don Earl  Read Replies (4) of 42771
 
Hi Dwight (off topic),

I was wondering about the effect of the yen and since you and Paul seem to be up on this sort of thing, I'll run it past you.

Since Japan has an extremely low unemployment rate and exports a great deal to the US, it seems to me that a higher exchange rate on the yen would tend to make a lot of their companies more profitable. If a company exports a car to the US for US$ and pays their employees in yen, wouldn't they be looking at an effective 20% cut in payroll expenses from earlier in the year? Imported raw materials would be more expensive, but there should be a balancing factor between the two. I may have my wires crossed but it seems to be that the current situation should be causing inflation in Japan rather than deflation. Wouldn't prices tend to go up and put pressure on wages?

I'm almost thinking I should pick up some stock in Japanese car companies, although that's so far outside my experience, I'm not sure if it makes sense.

Regards,

Don
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