TOKYO, Oct 25 (Reuters) - Japanese electronics conglomerate Toshiba Corp is stepping up its expansion of overseas production and procurement to withstand a further rise in the yen as far as 70 to the dollar, its chief executive said on Monday.
Toshiba conducted a stress test last October, dubbed "Project 70", that assumed an exchange rate of 70 yen to the dollar and became the basis for expanded efforts to counter the effects of the rising yen.
"People said the yen would never go to that level when we came up with this plan last October, but looking at the weakness of the dollar and the strength of the yen now, that may not be too far from reality," Toshiba CEO Norio Sasaki said at the Nikkei Global Management Forum in Tokyo.
The dollar fell to a 15-year low against the yen on Monday, drawing closer to its postwar record low of 79.75 yen set in 1995 as traders took a weekend G20 statement as a green light for continued dollar weakness.
Yen strength has taken its toll on Japan's export-fuelled economy, with data on Monday showing export growth slowed for a seventh consecutive month while policymakers struggle to keep the fragile economic recovery intact.
Sasaki said Toshiba's measures, which also include expanding strong businesses and shrinking money-losing operations, have been paying off and now the company's operating profit actually rises by 700 million yen ($8.6 million) for each 1 yen gain in the Japanese currency's value against the dollar.
Yen strength against the dollar used to cut into Toshiba's profit.
He added, however, that the euro was a "different story".
Strength in the yen generally hurts the competitiveness of Toshiba, the world's No. 2 maker of NAND-type memory chips used widely in cellphones and consumer electronics, as its rival Samsung Electronics Co enjoys the benefits of a relatively weak won.
"We have the currency issues and other disadvantages including a high corporate tax," Sasaki said.
"What we can try to do is to stay ahead with advanced technology while lessening the impacts (of these disadvantages)."
The dollar has fallen steadily across the board, including against the yen where the threat of intervention by Japanese authorities has slowed but not halted the slide, as the market anticipates a second round of quantitative easing from the Federal Reserve. ($1=81.35 Yen) (Reporting by Sachi Izumi; Editing by Edmund Klamann)