FRANKFURT - There was a touch of gloating in the most recent earnings report issued by Kuka, a company based in the Bavarian city of Augsburg whose orange industrial robots are a common site on auto assembly lines around the world.
Kuka said last month that its sales had more than bounced back to levels predating the financial crisis. By contrast, sales at its Japanese rivals were still a third below where they had stood in early 2008, before the global downturn slammed the machinery industry.
A surge in orders from European carmakers has helped Kuka's rebound. But it also does not hurt that the euro has plunged compared with the yen, which has given Kuka a price advantage against Japanese competitors that it did not have a year ago.
"Price is not the sole criteria, but it's an important criteria," Kuka's chief executive, Till Reuter, said in an interview. "The weaker euro is to our advantage."
European companies tend to focus on the dollar exchange rate, because the United States currency is the most important for world trade. But the yen's recent strengthening is playing a role in Germany's export boom as well.
The euro has fallen 19 percent against the yen in the last year, nearly double the decline against the dollar. Over all, the euro is down more than 36 percent against the yen since August 2008.
A stronger yen is good news for German machinery and auto companies whose main competitors often are based in Japan. And it is, of course, bad news in Japan, where the strong currency has become a political issue.
The rivalry between the two countries is particularly intense in China. It is the fastest-growing market for many German companies, but proximity gives Japanese exporters an edge.
Eoin Treacy's view Fullermoney has often pointed out that the euro's "crisis" was good news for the regions exporters, not least Germany's world class multinational companies.
Meanwhile, Japan's zombie government has been clueless in dealing with the yen's latest strength. I am surprised that Japanese industrialists have not yet stormed their government's ramparts. Perhaps they will if Ichiro Ozawa does not topple current prime minister Naoto Kan later this month.
Meanwhile, do not believe that nonsense about intervention not being effective. The easiest way to get an overvalued currency down is to announce that you are going to print a great deal more of it. A Japanese version of Ben Bernanke's helicopter speech would do nicely.
Here is a paragraph from a related article by Hiroko Tabuchi, also published by the NYT and IHT:
The difference is laid bare in a startling statistic: For every yen that the Japanese currency gains in value against its assumed dollar rate of ¥90, Toyota says, it loses ¥30 billion, or $357 million, in operating profit. If the exchange rate stays at the current ¥84 to a dollar, Toyota's operating profit for its financial year ending next March, which the company forecasts will reach ¥330 billion, could fall by half.
Sayonara Japan, until you address the too strong yen problem, the population problem and the gender equality problem.