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Author Topic: If the Japanese Yen is now low, why are Canon prices staying high?  (Read 8377 times)

Britsinbeavercreek

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The Japanese Yen has fallen considerably in value in recent months. Japanese exports should therefore be much cheaper now for buyers, so why are Canon prices remaining so high? I'd love a new Canon 5D mk III but current MAP limitations are keeping prices high and stopping me from buying.

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #1 on: May 18, 2013, 05:16:04 PM »
I’m going to follow this thread with interest, I do not understand why the prices are not going down neither.

Brand B

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #2 on: May 18, 2013, 06:40:32 PM »
Probably because they wanted them higher to begin with but could not raise them and remain competitive.  They can now enjoy higher margins for a while.

Have Nikon's or Sony's prices dropped?

pdirestajr

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #3 on: May 18, 2013, 07:00:00 PM »
It must mean Canon can do it, which means they actually know a few things about running their business. Oh well.
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brett b

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #4 on: May 18, 2013, 07:31:33 PM »
The Japanese Yen has fallen considerably in value in recent months. Japanese exports should therefore be much cheaper now for buyers, so why are Canon prices remaining so high? I'd love a new Canon 5D mk III but current MAP limitations are keeping prices high and stopping me from buying.

Why would they lower their prices? Just because their margin is higher for the time being?
They will lower their prices when the market forces them to...when demand falls.

barracuda

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #5 on: May 18, 2013, 08:10:13 PM »
The Japanese Yen has fallen considerably in value in recent months. Japanese exports should therefore be much cheaper now for buyers, so why are Canon prices remaining so high? I'd love a new Canon 5D mk III but current MAP limitations are keeping prices high and stopping me from buying.

The falling yen does not benefit all Japanese companies equally. In Canon's case, every dollar move in dollar/yen costs Canon $80 million dollars in earnings because of their reliance on imported parts. For example, in the last week, the dollar/yen went from about 101.87 on Monday May 13th to 103.16 on Friday. That move costs Canon about 103.2 million dollars in earnings. Canon's stock price reflects the effects of quantitative easing by the BOJ (Bank of Japan), as it is down over 5% for the year in a Japanese market that is up over 41% for the year. Canon can mitigate the effects of dollar/yen moves by hedging strategies, e.g. stock piling on imported parts when the value of the yen is higher on the currency markets, but that can be tricky if they buy too many parts that they cannot use. Similarly, airline companies trade oil futures to mitigate their fuel costs, i.e. buying when prices are low.

Pure Japanese exporters benefit the most, i.e. companies with the least amount of reliance on imported parts and capex spending.
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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #6 on: May 18, 2013, 08:12:34 PM »
Prices did not rise when the yen went up, they won't drop unless its a deep and long term drop.

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #6 on: May 18, 2013, 08:12:34 PM »

eml58

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #7 on: May 18, 2013, 09:34:01 PM »
The Apple/Adobe scenario in fact for Aussies.

You would benefit where you buy your gear in Yen, in Japan, as long as you started out in USD.

Problem there of course is that camera Prices in Japan are not that cheap when compared to the USA, the US benefits by Market size, here in Singapore we try to purchase local equivalent to a US best price using say B&H as a base point, then if we leave Singapore within 2 months we benefit by the GST refund 7%, it's one of the few ways I've found to get a cheaper price than the US.

Hong Kong you certainly can, but you then need to be more concerned about "Grey" Market issues & lack of Support when the shiny new Camera decides to go belly up.
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jimenezphoto

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #8 on: May 18, 2013, 09:39:22 PM »
The Japanese Yen has fallen considerably in value in recent months. Japanese exports should therefore be much cheaper now for buyers, so why are Canon prices remaining so high? I'd love a new Canon 5D mk III but current MAP limitations are keeping prices high and stopping me from buying.

Why would Canon lower their prices when people (not me) are all too happy to cough up their cash. When I hear of a lens being updated I know the price of the replacement lens will be 3 to 4 times higher than the out going model. I only own Canon lenses (six of them) but Canon is doing it's best to price me out. Sigmas are getting more interesting of late. Maybe it's time to look at independent lens makers.

dilbert

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #9 on: May 18, 2013, 10:01:55 PM »
The Japanese Yen has fallen considerably in value in recent months. Japanese exports should therefore be much cheaper now for buyers, so why are Canon prices remaining so high? I'd love a new Canon 5D mk III but current MAP limitations are keeping prices high and stopping me from buying.

Because the stock was bought when the Yen was high.

AndyR

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #10 on: May 18, 2013, 10:28:39 PM »
The Japanese Yen has fallen considerably in value in recent months. Japanese exports should therefore be much cheaper now for buyers, so why are Canon prices remaining so high? I'd love a new Canon 5D mk III but current MAP limitations are keeping prices high and stopping me from buying.

Because the stock was bought when the Yen was high.

+1 same as gas station when they buy their product...then the price of oil plummets on global markets...their tanks in the ground are full of higher price fuel...so they sell at the pump at the same price and do not adjust their prices until they buy in more product

AndyR

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #11 on: May 18, 2013, 10:32:36 PM »
The Japanese Yen has fallen considerably in value in recent months. Japanese exports should therefore be much cheaper now for buyers, so why are Canon prices remaining so high? I'd love a new Canon 5D mk III but current MAP limitations are keeping prices high and stopping me from buying.

The falling yen does not benefit all Japanese companies equally. In Canon's case, every dollar move in dollar/yen costs Canon $80 million dollars in earnings because of their reliance on imported parts. For example, in the last week, the dollar/yen went from about 101.87 on Monday May 13th to 103.16 on Friday. That move costs Canon about 103.2 million dollars in earnings. Canon's stock price reflects the effects of quantitative easing by the BOJ (Bank of Japan), as it is down over 5% for the year in a Japanese market that is up over 41% for the year. Canon can mitigate the effects of dollar/yen moves by hedging strategies, e.g. stock piling on imported parts when the value of the yen is higher on the currency markets, but that can be tricky if they buy too many parts that they cannot use. Similarly, airline companies trade oil futures to mitigate their fuel costs, i.e. buying when prices are low.

Pure Japanese exporters benefit the most, i.e. companies with the least amount of reliance on imported parts and capex spending.

dont know where ur getting ur info but its completely wrong dude...

http://www.bloomberg.com/quote/7751:JP

Canon's share price is up about 12% so far in 2013 and nearly 20% for the last 12 months they're doin' fine

J.R.

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #12 on: May 18, 2013, 10:37:52 PM »
Canon has upped it's profit guidance because of devaluation of the JPY. That basically confirms that there is no price reduction in the offing. Canon is just going to use the forex gains to boost their balance sheets.
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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #12 on: May 18, 2013, 10:37:52 PM »

AndyR

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #13 on: May 18, 2013, 10:54:37 PM »
Canon has upped it's profit guidance because of devaluation of the JPY. That basically confirms that there is no price reduction in the offing. Canon is just going to use the forex gains to boost their balance sheets.

Canon doesn't play the fx market -> they price in yen and pay their staff in yen...the 5d mkii was launched in yen as was the mkiii...both actually less than 5000 yen apart despite a 4 year gap, thats fifty bucks increase in american dollars between 2008 to 2012 for all the extra features (more af points, higher iso etc.).

If canon were pricing their products in foreign currency and paying their costs in domestic...well that would be the same as you having a Norwegian Krone home loan whilst being paid in American Dollars => R I S K Y. Stocks who run un-hedged fx risk get hosed by brokers and investors.

Canon guided higher probably because they're selling more products (volume boost) thanks to more affordability in overseas markets thanks to the weaker yen...WHY cos' they price in yen! Would also explain why people on this site recently refer to increase in mkt share that canon is enjoying over other jap cam companies

barracuda

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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #14 on: May 18, 2013, 11:21:37 PM »
The Japanese Yen has fallen considerably in value in recent months. Japanese exports should therefore be much cheaper now for buyers, so why are Canon prices remaining so high? I'd love a new Canon 5D mk III but current MAP limitations are keeping prices high and stopping me from buying.

The falling yen does not benefit all Japanese companies equally. In Canon's case, every dollar move in dollar/yen costs Canon $80 million dollars in earnings because of their reliance on imported parts. For example, in the last week, the dollar/yen went from about 101.87 on Monday May 13th to 103.16 on Friday. That move costs Canon about 103.2 million dollars in earnings. Canon's stock price reflects the effects of quantitative easing by the BOJ (Bank of Japan), as it is down over 5% for the year in a Japanese market that is up over 41% for the year. Canon can mitigate the effects of dollar/yen moves by hedging strategies, e.g. stock piling on imported parts when the value of the yen is higher on the currency markets, but that can be tricky if they buy too many parts that they cannot use. Similarly, airline companies trade oil futures to mitigate their fuel costs, i.e. buying when prices are low.

Pure Japanese exporters benefit the most, i.e. companies with the least amount of reliance on imported parts and capex spending.

dont know where ur getting ur info but its completely wrong dude...

http://www.bloomberg.com/quote/7751:JP

Canon's share price is up about 12% so far in 2013 and nearly 20% for the last 12 months they're doin' fine

I'm using Canon's ADR's on the NYSE (so in USD terms). Symbol CAJ:

http://finance.yahoo.com/q/hp?s=CAJ&a=11&b=31&c=2012&d=04&e=19&f=2013&g=d

So closing price on 2012/12/31=$39.21; and closing price on 2013/05/17=$37.10, of course both in USD.

Also, the $80 million (USD) earnings loss per each dollar/yen move up comes from CNBC (about 1:17 into the video):

http://video.cnbc.com/gallery/?video=3000167955&__source=yahoo%7Cheadline%7Cquote%7Cvideo%7C&par=yahoo

I'm a CAJ stock holder, so I feel the pain of the 5% loss while the market indices are generally up for the year and in the case of the Dow and S&P 500, at all-time highs.

So if you extrapolate, the weakening yen is causing Canon's margins to get squeezed (higher import parts costs). In that environment, Canon would be hard pressed to decrease prices. I'm guessing Canon has already accounted for fluctuations in the exchange rate, which is why MAP prices are so high and why they will remain high as they release new products.
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Re: If the Japanese Yen is now low, why are Canon prices staying high?
« Reply #14 on: May 18, 2013, 11:21:37 PM »