Skip to comments.Weak yen takes the wind out of Japanese firmsí acquisitions
Posted on 07/09/2013 12:23:53 AM PDT by TexGrill
Japanese companies made the fewest acquisitions in a decade during the first half of 2013 as the yens volatility climbed to a four-year high, cooling buying interest.
The number of deals announced in the first half of 2013 was 997 with a total value of $45.7 billion, according to data compiled by Bloomberg. Thats the lowest number of deals and value since the first half of 2004. Total deal value is 47 percent lower from the first half of 2012.
Since Prime Minister Shinzo Abe swept into power in December on promises to resurrect the economy by expanding stimulus measures and weakening the yen, the Japanese currency has whipsawed between 82.36 and 103.21 to the dollar.
The yens 100-day volatility rose to 14.81 points in July, the highest since August 2009, and more than double the 6.97 figure at the start of the year.
Companies had set their budgets for the year as of April and May under certain assumptions, but theyre not sure they will hold, said Nobuhisa Ishizuka, a Tokyo-based partner specializing in mergers at Skadden, Arps, Slate, Meagher & Flom. This makes it difficult for a lot of them to pull the trigger.
Currency options show volatility in the yen is set to continue, which could force companies to cut the size of deals or delay them. JPMorgans Group of Seven Volatility Index, based on currency-option premiums, climbed to 11.96 percent on June 24, the highest since January 2012.
(Excerpt) Read more at koreajoongangdaily.joins.com ...