Mitsubishi Motors downgraded to Reduce by Nomura on FX concerns

Ceramic cats at DaisoCeramic cats at Daiso

Nomura downgraded Mitsubishi Motors to Reduce from Neutral, citing headwinds from foreign-exchange weakness.

”We see a major impact from the strong yen,” Nomura said in a note on Tuesday, noting the automaker has a greater foreign exchange sensitivity than the industry average.

”The sharp weakening not only of major currencies, such as the U.S. dollar, the euro and the Australian dollar, but also of currencies in major markets such as the Philippines and Indonesia since January 2018, have caused a sharp deterioration in business conditions for Mitsubishi Motors, which has a high weighting of production in and exports from Japan and Thailand,” Nomura said.

Nomura cut its target price on Mitsubishi Motors to 660 yen from 800 yen after lowering its earnings forecasts.

Shares of Mitsubishi Motors were down 0.96 percent at 827 yen at 9:10 SGT. The intraday low of 817 yen may act as initial support.