1. When preparing consolidated financial statements, foreign exchange rates cause what is called translation risk. This risk stems from the possibility that your profits will be higher or lower depending on the current exchange rates.
Sony lowered their profits due to a strong Yen. When consolidating all subsidiaries, the consolidated financial statements are presented in the currency of the parent company, in this case, SONY Japan hence the Yen.
If the Yen is strong, the consolidated profits are lower due to the fact than when you convert the USD subsidiary's profits to Yen, due to the Yen been stronger, you need more USD to buy Yen.
e.g. say 1 USD = 100 YEN
Consolidated profits = 100 Yen
When the Yen is strong, say 1 USD = 95 YEN
Consolidated profits = 95 Yen
2. Its been speculated, however no one really knows. I provided a link before but that was just a general article.
3. No one knows
