
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, August 25, 1993                   TAG: 9308250028
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Associated Press
DATELINE: TOKYO                                LENGTH: Medium

HIGH YEN HURTING PROFITS

Two more large Japanese companies on Tuesday reported big drops in profits, a sign the surging yen is taking a growing toll on the nation's export-oriented economy.

Both Honda Motor Co. and Matsushita Electric Industrial Co. blamed the yen's rise in large part for their earnings declines in the April-June quarter. They also cited weak demand in Japan, Europe and the United States.

Honda said its earnings plunged 62 percent from the 1992 period to $58.6 million. Matsushita, parent of Panasonic and Technics brands, said its profits sagged 23 percent to $64.4 million.

Last week, Sony Corp. said its quarterly earnings also fell - 48.5 percent to $73.9 million.

The strong yen hurts Japanese exporters by making their products more expensive and less competitive overseas. It also reduces the value in yen of profits brought back to Japan.

Washington moved last week to halt the yen's rise after months of arguing in favor of a stronger Japanese currency. It cited possible damage to Japan's economic recovery - and the world economy.

The U.S. administration has said a strong yen could trim the big Japanese-U.S. trade surplus by making U.S. goods cheaper in Japan. But a continuing recession in Japan would make Japanese less likely to buy any products.

Japan's key economic indicators registered 36.4 percent in June, falling below the 50 percent "boom or bust" line for the second month in a row and suggesting a further contraction in the months ahead.

The dollar has dropped from about 125 yen in February to as low as 100.40 last week. After U.S. intervention, it now is trading at about 104 yen.

by CNB