Olympus concerns not endemic to Japanese corporates

ON JAPAN

Corporate Japan has had a difficult year. Firstly, the earthquake, which struck in the early part of the year with devastating consequences, dealt a severe short-term blow to the economic supply chain.

Secondly, Japan has been unable to extricate itself from the European debt crisis and the yen, seen as a safe haven, has gone on to new highs despite intervention from the Bank of Japan and the Ministry of Finance. This has acted as a drag on earnings of many manufacturing companies. Thirdly, the recent Thai floods have again struck at the heart of the Japanese supply chain and we expect production and exports for Q4 2011 to be restrained in areas such as automobiles and hard disk drives. Lastly, macro concerns gave way to corporate governance issues in early November as Olympus Corporat...