On August 8, Japan’s corporate earnings season hit its peak, with many companies listed on the Tokyo Stock Exchange reporting results for April to June. Overall, combined net profits fell 10.2% compared to the same period last year — the first decline in three years for this quarter.

Key Points:

• The main reason for the drop was the impact of US tariffs under the Trump administration, which hurt the manufacturing sector.
  • Manufacturers saw profits drop 22.7%.
  • Transport equipment, including cars, was hit the hardest, with profits falling 42.1%.
• Analysts now expect that total profits for the fiscal year ending in March 2026 will also decline for the first time in six years.
• The data was compiled by SMBC Nikko Securities, which analyzed 823 companies (about 70% of those with March fiscal years listed on the Prime Market).
  • Chief strategist Hikaru Yasuda said the auto industry was especially affected due to weak domestic and global sales.

On the brighter side:

• Semiconductor-related companies performed well due to strong demand, especially for AI chips, helping the electronics sector rise 18.2%.
• The real estate sector also did well, with a 30.4% increase, thanks to rising sales of luxury condos in central Tokyo and higher office rents.