TOKYO -- Listed Japanese companies have cut their full-year profit forecasts by over 2 trillion yen ($18.3 billion), the steepest downgrade in seven years, as a slowing global economy weighs on exporters.
About 70% of 574 major companies had lowered their net forecasts for the year ending next March as of Wednesday, according to data compiled by Nikkei as corporations reported first-half results.
Listed companies' net profits are now forecast to grow just 2% on the year in the October-March half, compared with a roughly 20% gain seen as of Oct. 1.
The downgrades were particularly steep in manufacturing, which relies largely on foreign demand. A recovery in the second half appears increasingly unlikely.
With the U.S.-China trade war dragging on longer than predicted, the Chinese economy has recovered less strongly than business leaders had expected.
But other factors contributed to the downgrades as well: declining auto sales, low capital spending, falling commodity and materials prices, weak emerging-market currencies and the chill in Japanese-South Korean relations.
Isuzu, which has factories in Thailand, suffered as the baht's appreciation against the dollar cut into export profits from the Southeast Asian country. Komatsu revised its exchange rate assumptions to account for a stronger yen against the euro and yuan.
Mitsui Mining & Smelting took a hit as South Korean manufacturers canceled orders to rely less on Japanese suppliers.
JXTG had the biggest downgrade in value terms -- a 165 billion yen cut. The group's president, Tsutomu Sugimori, blamed worse-than-expected declines in petrochemical prices. A drop in coking coal prices factored into trading house Mitsubishi Corp.'s downgrade, which lowered its view from a 2% profit gain to a 12% decline.