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Sony braced for impact of weakening Euro

Heavy European export balance will hit corporation division hard

Sony has warned that it expects the continuing weakening of the Euro to severely affect its finances, saying that the European economic crisis will have a "huge impact" on its business.

Because the technology giant exports so many of its goods to European territories, any weakening of the Euro has direct fiscal consequences. Should one of the EU countries currently teetering on the brink of defaulting on an international loan do so, the Euro would fall ever further.

"There are no countermeasures that we can take for the moment," said Sony's corporate treasurer Hiroshi Kurihara told Bloomberg. "There is a huge impact on our earnings."

Whilst some measures can be taken to limit the extent of damage done by currency fluctuations, the Euro's current decade low against the Yen means that many Japanese exporters are suffering. Korean company Samsung, however, has been able to capitalise on the situation thanks to a weakening of its own currency, the Won.

Measures are being taken to prevent a deepening of the Eurozone crisis, but none are yet to prove effective. Switzerland, in a somewhat unusual display of fiscal benevolence, has pinned its Franc to the Euro exchange rate in an attempt to reverse the currency's decline, but that move is unlikely to counterbalance the potential ramifications of a defaulting Greece or Spain.

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