Shares in Japan's major electronics companies slid again on Monday, as the benchmark Nikkei 225 index hit its lowest level in 26 years and the yen strengthened against the dollar.
An emergency joint statement issued by the Group of Seven major industrialized nations expressing strong concern over the recent sharp rise in the yen's value did little to halt the currency's climb. It was trading at Â¥92.85 to the US dollar at 4 p.m. on Monday afternoon, up 2.29 yen since Friday.
The strong yen makes Japanese goods more expensive overseas and also reduces the value of profits made overseas when they are brought back to Japan, hitting companies that are major exporters like Sony. The currency's climb in recent weeks was partly behind the revision Sony made to its financial outlook last week. Sony had assumed an average exchange rate of ¥105 to the US dollar when it originally issued its financial outlook but the revised outlook assumed ¥100 to the US dollar, which is already far away from the currency's current value.
Shares in Sony, which lost 12 percent of their value on Friday, were again hit hard and closed down 8 percent at ¥1,821 (US$19.59).
On Monday Canon revised its financial outlook downwards because of the strong yen. The company said the exchange rate and a slowing global economy hit demand for its products and as a result net profit in the July to September period was down 21 percent against the same period last year. It now expects to record a full year net profit of ¥375 billion, down from its previous target of ¥500 billion.
The results and earnings forecast downgrade were issued after the Tokyo market closed and won't be reflected in the company's stock price until Tuesday at the earliest. In Monday trading Canon shares were down 11 percent.
Other electronics companies saw steeper drops.
Shares in computer memory chip maker Elpida slid 16 percent to an all-time low after investment banks cut their outlook for the shares. Pioneer saw its shares decline 15 percent also after a cut in the share outlook, Mitsubishi Electric dropped 14 percent and Sanyo Electric was off 12 percent.
Shares in computer game maker Nintendo, which also relies on overseas markets for a lot of its sales, were down 11 percent, NEC shares fell 10 percent and single digit declines were recorded by Fujitsu, Panasonic and Toshiba.
This week sees quarterly earnings for the July to September period due from many electronics companies. Panasonic and Ricoh are due to report after the market close on Tuesday. Toshiba, Fujitsu and Sony will report on Wednesday. Thursday will see Sharp, Nintendo, NEC, Hitachi and Kyocera. Cell phone carrier NTT DoCoMo is due to report results on Friday.