# With the Yen plunging, will we see price drops now?



## ScottyP (Feb 15, 2013)

We heard a lot (a LOT!) of people defending percieved high Canon pricing, saying it is due to the run up in the value of the Yen that ended in 2011. Sometimes this was said with the kind of absolute certainty that can only come from someone with no training in a subject. 

Now Japan is printing money to achieve 2% inflation in their economy, and the Yen is plunging as a result. See http://www.bbc.co.uk/news/business-21468587

Question: If the High Yen = High Canon Prices argument was as valid as was asserted so many times, will we now expect to see this effect working in reverse? Or will prices stay the same, and the True Believers simply latch onto some other factor to explain it?


----------



## Mt Spokane Photography (Feb 15, 2013)

Prices have been dropping for the last 6 months, thats not likely to change. The big reason for price drops is the poor world economy. 
Prices did not go up as the yen went up, they actually dropped.


----------



## brad goda (Feb 15, 2013)

Mt Spokane Photography said:


> Prices have been dropping for the last 6 months, thats not likely to change. The big reason for price drops is the poor world economy.
> Prices did not go up as the yen went up, they actually dropped.



+1 !!


----------



## Jim K (Feb 18, 2013)

ScottyP said:


> Question: If the High Yen = High Canon Prices argument was as valid as was asserted so many times, will we now expect to see this effect working in reverse? Or will prices stay the same, and the True Believers simply latch onto some other factor to explain it?



I remember decades ago when the Mark rose vs. the Dollar the price of a Benz rose because of it. When the Mark dropped vs. the Dollar the prices held.


----------



## Rienzphotoz (Feb 23, 2013)

ScottyP said:


> We heard a lot (a LOT!) of people defending percieved high Canon pricing, saying it is due to the run up in the value of the Yen that ended in 2011. Sometimes this was said with the kind of absolute certainty that can only come from someone with no training in a subject.
> 
> Now Japan is printing money to achieve 2% inflation in their economy, and the Yen is plunging as a result. See http://www.bbc.co.uk/news/business-21468587
> 
> Question: If the High Yen = High Canon Prices argument was as valid as was asserted so many times, will we now expect to see this effect working in reverse? Or will prices stay the same, and the True Believers simply latch onto some other factor to explain it?


In January 2013 I paid US$ 1049 for Tamron 24-70 f/2.8 VC from Amazon.co.jp (that's amazon's Japanese website) ... but about 6 months prior to that, the price was around US$ 1400 in amazon.co.jp
Today the price is US$1029 ... check this link http://www.amazon.co.jp/TAMRON-SP24-70%EF%BD%8D%EF%BD%8D-F2-8-%E3%82%AD%E3%83%A4%E3%83%8E%E3%83%B3%E7%94%A8-A007E/dp/B007RKL1KE/ref=sr_1_1?ie=UTF8&qid=1361609278&sr=8-1


----------



## Faaier (Feb 23, 2013)

All depends on Canon paying there bills in Yen or any other valuta. If they pay there raw materials with dollars, then price will certainly not change. Pricing in Japan for any camera would go up though...


----------



## hendrik-sg (Feb 23, 2013)

wi wont see price drops, but profit increases.

price is as high as customers are ready to pay. 

a jeans costs less than 10$ to produce and is solld between 100 and 200$. no corelation to costs at all, just market production.

if anything is not producable at prices for which it can be sold it will not be produced, for example a 1200 f 5.6 is


----------



## Rienzphotoz (Feb 23, 2013)

Faaier said:


> All depends on Canon paying there bills in Yen or any other valuta. If they pay there raw materials with dollars, then price will certainly not change. Pricing in Japan for any camera would go up though...


What? ???


----------



## Faaier (Feb 23, 2013)

Rienzphotoz said:


> Faaier said:
> 
> 
> > All depends on Canon paying there bills in Yen or any other valuta. If they pay there raw materials with dollars, then price will certainly not change. Pricing in Japan for any camera would go up though...
> ...


I mean that Canon probably pays its bills in dollars/yuan to suppliers worldwide. IF Canon sells its camera's in yen to distributors worldwide then their income wouldn't change but their costs (in yen) would go up. 

However, Canon might produce in Japan mainly but they will also sell their products in the foreign valuta's which can be used to purchase the raw materials worldwide... Thus impact of valuta rates should be minimal for such a company. 

Only if they are doing extra ordinary huge yen investments (new plants), it could have a benefit to us... Consumers! (Because the cost of these investments expressed in dollars would be lower) ... My 2c.


----------



## docsmith (Feb 23, 2013)

I think we are already seeing the "prices drop." But the version we are seeing is mostly in extended rebates and lower costs on camera bodies. But the 5DIII and 6D prices have dropped almost in proportion to the devaluation of the yen over the same time (at least against USD). Same with the prices of the 24 mm f/2.8 IS and 28 mm f/2.8 IS. Granted, everyone thought those were overpriced when announced, so it could be market adjustment, but it is in line with the yen devaluation.

What will be interesting is if canon keeps offering long and deep----almost permanent--rebates or if they actually decrease the cost of their products.


----------



## FunPhotons (Feb 23, 2013)

International corporate finances are complex, they have operations all over the world. I guarantee that currency fluctuations (which continually change) play some part, but thinking that end price will change due to that is simplistic.


----------



## ScottyP (Feb 23, 2013)

FunPhotons said:


> International corporate finances are complex, they have operations all over the world. I guarantee that currency fluctuations (which continually change) play some part, but thinking that end price will change due to that is simplistic.



This is no doubt correct, but my point is: where was this sentiment when the True Believers were defending Canon prices as clearly being due to the high Yen to low Dollar exchange rate?


----------



## unfocused (Feb 23, 2013)

ScottyP said:


> FunPhotons said:
> 
> 
> > International corporate finances are complex, they have operations all over the world. I guarantee that currency fluctuations (which continually change) play some part, but thinking that end price will change due to that is simplistic.
> ...



To be fair, I think there were only a handful of people pointing to the exchange rate and even among that small group, there were several who said it was only one factor, not the primary cause. I never bought into the exchange rate argument in the first place.


----------



## justawriter (Feb 23, 2013)

I think the decision would involve several calculations on Canon's part. To start, will the company make more money from retaining the added profit from currency fluctuations or from selling more units at a lower price? Are other competitors lowering their prices, which could take a bigger bite out of Canon's sales? Does the company expect the drop in the yen to be long lasting, which could cost the company sales if it has to raise prices relatively soon after dropping them? As pointed out above, what has the yen done to Canon's raw material expenses? I'm sure there are a dozen more considerations they have to make that I wouldn't even think of. So after all that, my answer would be an incredibly firm, "It depends."


----------



## FunPhotons (Feb 23, 2013)

ScottyP said:


> FunPhotons said:
> 
> 
> > International corporate finances are complex, they have operations all over the world. I guarantee that currency fluctuations (which continually change) play some part, but thinking that end price will change due to that is simplistic.
> ...



Yeah I brought it up back then and nobody paid attention. Companies charge what the market will bear, end of story. 

I know this because I work in a parallel industry (unrelated but very similar) to Canon, and in fact my company is lot like them too. Trust me that the marketing dept. primarily is setting prices, and they have no idea about currency. That is handled in finance and at the corporate level, far removed.


----------

