Yen gains against dollar, Nintendo shares go down

The Japanese Yen gained strength over the dollar yesterday, which ironically turns out to be a bad thing for Nintendo Company Ltd. Because most of Nintendo’s business comes from abroad, the company’s stocks are very sensitive to even the slightest change.

From JPY 114.27 to the dollar, the yen rose to JPY 114.12. The small change caused shares to go down JPY 400 to 600 per share (about US$ 3.50 to US$ 5.25) and effectively brought down shares by 5.4%. Analyst Eiji Maeda of JP Morgan explains that an increase of even one yen against the euro would bring down Nintendo shares by JPY 200 to 400.

The company has sold 67% of its total Nintendo Wii consoles and 61% of its Nintendo DS handhelds outside Japan so a change in the exchange rate can certainly be significant. While the drop in the market may be a blow to Nintendo, it’s doubtful it would slow its pace. Last July it had sold more Wii consoles than both the Sony PS3 and the Xbox 360 combined.

The Japanese Yen gained strength over the dollar yesterday, which ironically turns out to be a bad thing for Nintendo Company Ltd. Because most of Nintendo’s business comes from abroad, the company’s stocks are very sensitive to even the slightest change.

From JPY 114.27 to the dollar, the yen rose to JPY 114.12. The small change caused shares to go down JPY 400 to 600 per share (about US$ 3.50 to US$ 5.25) and effectively brought down shares by 5.4%. Analyst Eiji Maeda of JP Morgan explains that an increase of even one yen against the euro would bring down Nintendo shares by JPY 200 to 400.

The company has sold 67% of its total Nintendo Wii consoles and 61% of its Nintendo DS handhelds outside Japan so a change in the exchange rate can certainly be significant. While the drop in the market may be a blow to Nintendo, it’s doubtful it would slow its pace. Last July it had sold more Wii consoles than both the Sony PS3 and the Xbox 360 combined.