Katherine,
I see, my usage of the word "decline" is confusing.
What I was trying to point out, is that if the Yen goes to, say, 100 Yen/$, then the US manufacturers will be able to better compete against their japanese competitors, win more business and the order component of the BTB will rise as the US manufacturers increase their market share.
The US manufacturers had an advantage during the first half of the decade, as the yen went from 160 to 80. They had windfall profits that helped their balance sheets. Now we have seen a lot of earnings warnings related to "the strong dollar" during the last three years.
US manufacturers today fight an uphill battle against their asian competitors. That's not a problem for INTC, MSFT, CSCO. But if a customer has a choice to buy a product either from the US or from asia, the current exchange rate favours the asian manufacturer.
That's true for >some< semi eq. products, it's true for >some< chips, for >some< disk drive components, as well as it's true for cars, machinery and other goods.
My point is: It's tougher to compete against Tokyo Electron at 140 Yen/$ than at 100 Yen/$.
The Yen exchange rate is very relevant to those Tech Stocks that have competitive exposure to asia. If the Fed intervention yesterday should mark a trend change in the yen, then this creates an huge investment opportunity LT.
Klaus |
