[Source/Observer Network, Pan Yuchen, Edited by Gao Shen] According to the "Nikkei Asian Review," it is expected that the combined net profit of Japanese listed companies in the fiscal year 2025 (April 2025 - March 2026) will decrease by 7% year-on-year, marking the first year-on-year decline in profits for Japanese listed companies in six years.

This data was derived from the fiscal year 2025 expectations of approximately 1,000 Tokyo Stock Exchange Prime Market-listed companies by the Nikkei. Specifically, Japan's pillar industries such as automobiles, steel, and shipping have all performed poorly, with U.S. tariffs and a strong yen severely burdening corporate profitability.

In terms of industry, the profits of manufacturing companies negatively impacted by U.S. tariffs and a strong yen will fall by 7%. In particular, the Japanese automotive industry, which is highly dependent on the U.S. market, is expected to see its profits decrease by 32%. Looking at the seven major automobile companies, among the four that have announced their earnings forecasts, Honda will see the largest drop in profits at 70%. Including the impact of tariffs and exchange rates, it is estimated that the profits of Japan's automotive industry will decrease by approximately 1.1 trillion yen (about RMB 55.1 billion).

Japanese Automotive Industry Nikkei News

Similarly, the profits of Japan's steel industry will also decrease by 27%. Considering the impact of several hundred billion yen in tariffs, Nippon Steel's profits will decrease by 43%. President Hitoshi Imai of Nippon Steel stated that the indirect export impact centered around automobiles is significant.

In addition, the profits of non-manufacturing industries in Japan will also decline by 7%. Among these, the shipping industry is particularly affected by U.S. tariffs. Based on the expectations of three companies including Nippon Yusen, tariffs could reduce the total profits by up to 170 billion yen (approximately RMB 8.52 billion). At the same time, the profits of Japan's electric power companies will also decrease.

Moreover, among companies that have released financial reports, 8% have not disclosed their final profit expectations for the fiscal year 2025.

Nevertheless, the profit levels of Japanese listed companies remain high. It is expected that the net profit of all listed companies in Japan in the fiscal year 2025 will reach 47.36 trillion yen (approximately RMB 2.37 trillion), which is the second highest level since March 2008; the cash holdings of Japanese listed companies reached approximately 110 trillion yen (approximately RMB 5.5 trillion) at the end of 2024, setting a new record.

Despite this, Japanese enterprises still face many challenges regarding medium- and long-term growth investments, business reforms, and salary increases for employees. Takaya Kitajima, chief equity strategist at Nomura Securities, believes that depending on how enterprises respond to changes in the market, the survival of the fittest in various industries may become more apparent.

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7507855577834521128/

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