Japan’s Government Is Helping Sony Corporation (ADR) (SNE) Win the Console War

Japanese stocks have done well

Along with a weaker yen, Japan’s Nikkei 225 stock index has also benefited from the government’s new policies. Although it’s down 20% from its high, the Nikkei had rallied over 60% in just six months.

Many investors were likely assuming that a weak yen would benefit Japanese companies — many of which are exporters. The ability of Sony to undercut Microsoft is proof that notion isn’t completely wrong.

But Sony is not the only company that stands to benefit. Japan’s automakers, like Toyota Motor Corporation (ADR) (NYSE:TM), could be well positioned. As with Sony, Toyota Motor Corporation (ADR) (NYSE:TM) could look to undercut its American and European rivals.

When he was CEO of General Motors Company (NYSE:GM) in 2003, Richard Wagoner complained about the value of the yen, which was then trading around 120 to 1.

DoubleLine’s Jeff Gundlach, famed for the performance of his massive bond fund, has said that the yen is poised to fall to as much as 200 to 1. If Toyota was doing well at 120, how much better could it do at 200?

The weak yen should continue to benefit Japanese exporters

As long as the yen stays weak, it should benefit Japan’s numerous exporters like Sony and Toyota. The companies can opt to pocket the yen, or undercut their competitors — as Sony appears to have done to Microsoft.

While Japanese stocks as a whole may have gotten ahead of themselves, a weaker yen can have a real, meaningful impact on Japan’s exporters.

The article Japan’s Government Is Helping Sony Win the Console War originally appeared on Fool.com.

Salvatore “Sam” Mattera has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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