The yen’s slide to its weakest level against the dollar since 1986 is reshaping the risk and reward profile of many Japanese stocks. Currency swings are now a key driver of potential gains and losses, especially for companies with heavy overseas exposure or sizeable dollar costs. For investors, that makes yen sensitivity too important to ignore. This article walks through three stocks from the Japanese Yen Sensitivity Stocks for Currency Shift Opportunities screener, highlighting two that may stand to benefit from a weaker currency and one where the same trend could pose a headwind.

Honda Motor (TSE:7267)

Overview: Honda Motor is a global manufacturer of automobiles, motorcycles, power equipment, and aircraft, selling everything from commuter bikes and passenger cars to generators and HondaJet planes across Japan, North America, Europe, Asia, and other regions.

Operations: Honda generates most of its revenue from the Automobile Business at ¥13.9t, followed by the Motorcycle Business at ¥4.0t, Financial Services at ¥3.5t, and Power Products and Other Businesses at ¥384.9b.

Market Cap: ¥5.7t

Honda Motor is closely tied to the weak yen narrative because it earns a large share of its revenue overseas. A cheaper currency can lift reported earnings while its cost base in Japan remains in yen. At the same time, the company is working through losses tied to its EV reset and restructuring, even as it focuses on hybrids, higher margin motorcycle growth in emerging markets, and new battery revenue streams such as data center energy storage in Ohio. Combined with a low P/S ratio versus peers and a solid, although not risk free, balance sheet, Honda is a stock where currency effects, operational changes, and execution risks are all pulling in different directions, which is exactly what the screener is designed to surface.

Honda Motor’s currency tailwind, EV reset and new battery revenue streams are only part of the story, and the real tension sits in how all that lines up against valuation in the DCF valuation analysis for Honda Motor

Precidian ETFs Trust - Toyota Motor Corporation ADRhedged (TMH)

Overview: Precidian ETFs Trust - Toyota Motor Corporation ADRhedged is a US listed fund that uses derivatives to give you exposure to Toyota and Japan’s auto sector, while aiming to hedge currency moves between the yen and the US dollar.

Market Cap: $926.4b

Precidian ETFs Trust - Toyota Motor Corporation ADRhedged is tightly linked to the yen story, because Toyota’s export heavy business can benefit when overseas revenues translate into more yen, even if the fund’s own structure is currently unprofitable and relies entirely on higher risk external borrowings. The recent quarterly dividend of US$2.3745 per share adds income potential, but limited history, negative Return on Equity and gaps in valuation and growth data make this a product where you need to think carefully about risk. For investors who want targeted exposure to Toyota in a period of extreme currency moves and potential policy intervention, this ETF is a focused tool rather than a broad, diversified vehicle.

Yen hedging around Toyota is only half the story for Precidian ETFs Trust - Toyota Motor Corporation ADRhedged, and the real question is how that structure interacts with its funding profile in the analysis report for Precidian ETFs Trust - Toyota Motor Corporation ADRhedged

ANA Holdings (TSE:9202)

Overview: ANA Holdings is Japan’s leading airline group, operating domestic and international passenger and cargo flights through its Air Transportation segment, while also running airport services, travel packages, and trade and retail businesses tied to air travel.

Operations: ANA generates the bulk of its revenue from Air Transportation at ¥2,313.2b, with smaller contributions from Airline Related at ¥361.6b, Trade and Retail at ¥154.2b, Travel Services at ¥65.3b, and Others at ¥49.7b, partly offset by a ¥404.9b unallocated adjustment.

Market Cap: ¥1.3t

ANA Holdings may warrant caution in a weak yen environment, even though its headline P/E of 8x appears low compared with the Japanese market and airline peers. As Japan’s flagship carrier, ANA carries substantial US dollar costs for fuel and aircraft leases that rise when the yen falls. Revenue forecasts of 3.2% and earnings growth of 2.05% indicate only modest expansion to absorb that pressure. Funding is entirely reliant on external borrowing, so higher rates or credit stress could have a significant impact. An unstable dividend history limits income appeal despite discussion of interim payouts. Share buybacks and recent profitability improvements are positive developments, but with net margins already edging down and the stock having lagged the broader market, the risks around currency, funding and valuation remain important considerations for investors.

ANA’s low 8x P/E, dollar fuel costs and reliance on external borrowing could be masking a tougher path than it first appears, and the real stress test only emerges in the 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.