Purchase Solution

Assess the impact of currency changes on Nippon Steel

Not what you're looking for?

Ask Custom Question

12. A common complaint leveled against the Japanese government is that it deliberately holds down the value of the yen to boost exports of Japanese products. American steelmakers have been particularly vocal in their complaints. As a remedy, steelmakers in 1985 asked President Reagan to curtail Japanese steel imports further and to impose a 25% tariff to offset what they describe as the "artificial" undervaluation of the yen. Does Nippon Steel profit from a weak yen? What are the likely consequences of the recent appreciation of the yen? Here are some facts. Imports of U.S. raw materials priced in dollars account for about one-third of costs, and exports to the United States generate about 4% to 5% of its revenues. Nippon Steel currently is exporting as much steel as it can to the United States under existing quota restrictions. What additional information do you need to fully assess the impact of currency changes on Nippon Steel?

Purchase this Solution

Solution Summary

This posting provides a detailed solution to the student's question.

Solution Preview

ANSWER. The initial response is that Nippon Steel gains more on the cost side than it loses on the revenue side from yen appreciation since it is not selling much overseas anyway. However, this analysis is misleading. Specifically, the ...

Purchase this Solution


Free BrainMass Quizzes
IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.