According to a recent report by a securities company, major listed Japanese companies are expected to see a decline in net profit for the six months ending in September due to a pause in the yen’s depreciation against the dollar, marking the first drop in four years. As of Wednesday, data shows that 577 companies listed on the Tokyo Stock Exchange’s Prime Market, which have released financial reports, recorded a 5.6% decrease in combined net profit from the previous year, amounting to approximately 14 trillion yen (around $90 billion).
Some analysts have expressed concerns over potential adverse impacts on corporate profits from economic policies under President-elect Donald Trump.
The 577 companies represent around 41% of the companies listed on the Prime Market. Although profits have declined in the first half, the aggregate net profit for the fiscal year ending in March 2025 is projected to increase by 0.4% due to recent yen depreciation.
Hikaru Yasuda, Chief Equity Strategist at SMBC Nikko Securities, stated that Trump’s planned tariff increases and anti-immigration measures “pose potential negative risks to the global economy as a whole.” Yasuda also noted concerns regarding corporate profits for the fiscal year ending March 2026 as Trump begins his presidential term next year.
Profits of transportation equipment manufacturers, including automakers, fell by 28.3% from the previous year to 2.82 trillion yen, impacted by the yen depreciation pause and quality scandals. Manufacturing sector profits fell 9.3% to 7.26 trillion yen, while profits for iron and steel companies plunged 43.4% due to worsening market conditions in China.
On the other hand, growing demand for semiconductors for artificial intelligence has provided a boost for machinery companies, which saw profits rise by 32.8%.
Non-manufacturing companies excluding financial firms recorded a combined profit decline of 3.6% to 6.33 trillion yen. Meanwhile, marine transportation companies saw sharp profit growth driven by rising container shipping rates.
