The upside of a strong yen

The yen is weakening against the dollar. Just a few weeks ago, the dollar was at 88.78 yen. Today it was at 93.27 yen. This is good news for exporters and the Nikkei rose for the sixth straight session in response. But there's an upside to a stronger yen. Japanese trading companies are looking to use that yen to acquire non-Japanese businesses.

Today's Wall Street Journal reported "the stronger yen makes purchases cheaper and potential competitors are sidelined by the credit crisis" .. and ... "After years of restructuring, Japanese firms are sitting on about $1.25 trillion in cash."

Marubeni Corp and Itochu Corp are essentially scooping up cheap assets when no one is looking. I guess I shouldn't say that, plenty of people are looking, but their hands are tied by the unavailability of financing.

Marubeni Corp has been focusing on infrastructure investments as well as energy, machinery, commodities and food businesses. Relationships continue to be vital as Marubeni's acquisitions have transpired through existing business associations.

Itochu Corp has been particularly active and focusing on food distribution, energy and mining.

Of course, the profit picture won't look good when the foreign currency is converted back to the strong yen, but this is for the long term. When the economy improves, the investments will pay off handsomely.