Originally posted by Samsungian Its just an observation. If VietNam collapses will this mean Hoya get to build Pentax gear at lower prices or higher prices ???
I don't know.
Vietnam has financial problems. Thats in the news today.
Is this reality good or bad for Hoya ?
If the Vietnamese Dong declines versus the Japanese Yen, Hoya will need fewer Yen to purchase however many Dong it takes to pay their workers (and anything else they actually pay for in Dong) - thus in the short term it is good for Hoya if Vietnam devalues.
But then devaluation is inflationary in the home country (Vietnam), so they will need to pay thier Vietnamese workers more Dong, which will cost more Yen, so the system self-corrects.
Further, any value of assets, cash or earnings currently held in Vietnam lose value when expressed in Yen if the Dong is devalued versus Yen. We don't know the magnitude of Hoya's exposure to home-country asset devaluation if the Dong is devalued.
If Hoya "hedges" its currency risk none of the above applies - changes are reduced to the extent of the percentage hedge (hedging is expensive in the current term, so companies calculate their apparent risk and hedge a portion of the currency exposure - 0% - 100%, depending).
We don't know enough to know what we don't know