With Ford's (NYSE:F) CEO Alan Mulally recently attacking the Bank of Japan, saying that markets and not banks should determine exchange rates, Motley Fool industrials analyst Blake Bos decided to take a moment to explain why the yen to dollar exchange rate is so important for U.S. automakers. He tells us that Japan's deflationary environment and strong currency are unsustainable and that the yen needs to weaken sharply in order for Japanese manufacturers to be able to compete. Blake tells investors that is only a matter of time for this weakening of the yen. When it does come down against the dollar, margins for Japanese automakers are going to rise, and the competition is going to get very fierce.

Blake Bos has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.