ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Economy

Weak yen promises record profits for second year

 (placeholder image)
Japanese exporters are continuing to reap the benefits of the yen's depreciation.   © Reuters

TOKYO -- Pretax profit of listed companies in Japan is expected to hit a record high in the fiscal year ending next March, according to a survey of 530 businesses, excluding financial companies, that had released results as of May 8.

     It would be the second record year in a row.

     Aggregate pretax profit for the just-ended fiscal year, including that of companies yet to announce their results, is estimated at roughly 30.42 trillion yen ($253 billion). That is nearly 400 billion yen more than the figure for fiscal 2007, the year before the global financial crisis erupted. It would be the first record high in seven years.

     These record figures can be chalked up primarily to the expanded revenue that Japanese exporters are enjoying on the back of the weak yen.

     For the current fiscal year, approximately 60% of the companies covered by the survey are expected to see revenue and profit growth, with total pretax profit rising around 10%. Again, this is largely due to the Bank of Japan-weakened yen. Numerous companies expect the yen will trade at 115 to the dollar, compared with 110 for fiscal 2014.

     Automotive and electronics companies are expecting an especially big profit increase, of about 740 billion yen, representing half the all-industry total.

     The global smartphone boom is also playing a big role since Japan is home to numerous component makers. Murata Mfg., for example, will see a record profit, driven by sales of compact condensers and other smartphone parts. Nitto Denko, meanwhile, is getting rich selling optical film for liquid crystal panels.

     Restructuring is also helping. Mitsubishi Heavy Industries, which is expected to post a record profit, has made progress integrating its thermal power generation system business with that of Hitachi. Sony, meanwhile, is seeing a surge in profit thanks to the restructuring of its electronics division.

     Results of domestic demand-oriented companies are also looking up. Yamato Holdings' revenue and profit are rising along with sales at online retailers. Central Japan Railway and East Japan Railway will also post record profits, thanks to an uptick in foreign business travelers and tourists taking their trains.

     However, the Chinese economy is slowing, and the business climate in Europe remains cloudy. Komatsu and Hitachi Construction Machinery are expected to see profit declines for the current fiscal year.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media