TOKYO: Japanese companies made record profits in the last financial year at a rate not seen since before the global financial crisis, thanks partly to a weaker yen which fattened earnings of big exporters.
Domestic demand in Japan remained soft throughout the year, due largely to a tax increase in April, but exporters such as Toyota Motor Corp. again enjoyed the benefit of the Japanese government’s weak-yen policy. Many of them see bigger profit growth in the year ahead.
About 30% of companies listed on the first section of the Tokyo Stock Exchange and with financial years ended March 31 reported a record net profit for the year—the most since 36% did so in 2006, data compiled by SMBC Nikko Securities showed.
Those companies’ net profit rose an aggregate 6.7% from the previous year, according to SMBC Nikko’s calculations, which were based on reported results and the projections of the few companies that haven’t reported. As of Friday, 98.9% had reported.
“Falls in the yen and oil prices helped some sectors benefit from external demand, such as auto and steel makers,” said Kayoko Ota, an analyst at SMBC Nikko Securities.
“Positive impact from a weaker yen may not accelerate this year, but if the currency stays around ¥120 [against the U.S. dollar], they can maintain solid earnings,” she added.The Japanese currency stood at ¥119.94 in recent trade.
Japanese auto makers Toyota and Nissan Motor Co. reported strong results, aided by the weaker yen and strong U.S. sales. Toyota’s annual net profit rose 19% to ¥2.17 trillion, a second-consecutive record, and the company forecast a third-straight record profit for this year.
“We are shifting from a phase of a willful pause into a phase of implementation [of prepared growth strategies]. Toyota has to continue challenging itself,” Toyota President Akio Toyoda said during the earnings announcement.
