TOKYO -- Japan's automakers, already mired in open-ended production shutdowns, awoke Thursday to a new hammer blow from the deadly earthquake and tsunami that has devastated the nation.
Overnight, the yen hit an all-time high against the dollar -- skyrocketing to 76.25 yen to the dollar, from a level in the low 80s earlier this week, according to news reports. Crushing exchange rates have been afflicting Japanese automakers all year, making it difficult if not impossible to make profits on many vehicles exported abroad.
They were already standing at the edge after Herculean cost-cutting and restructuring efforts over the past year. And the yen's current surge will only make matters worse, especially if it persists or establishes a new, lower trading range.
The new high shattered the previous record of 79.75 yen to the dollar set in in 1995.
When a 9.0-magnitude earthquake pulverizes the infrastructure, devastates a world-leading economy and takes what is estimated to be at least 10,000 lives, you wouldn't intuitively expect speculators to start snatching up the afflicted country's currency.
But analysts say investors are moving fast to buy the currency, betting that Japanese insurers and other companies will have to repatriate overseas funds to help finance insurance payouts and reconstruction.