Japan Inc. girds for $15bn blow to operating profit as strong yen bites
KOSUKE OKAMOTO
TOKYO -- Major Japanese companies expect a combined 2.2 trillion yen ($15.3 billion) hit to operating profit in the year ending March 2026 if the yen averages around its current rate of 143 to the dollar, ending a five-year streak in which a weakening home currency buoyed exporters' earnings.
The figure is for 39 companies in the Nikkei Stock Average that have disclosed the impact of exchange rates on operating profit.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Today
28 minutes ago
- Japan Today
Japanese manufacturers slightly more optimistic despite Trump tariff worries
By YURI KAGEYAMA Business sentiment among large Japanese manufacturers has improved slightly, according to a survey by Japan's central bank released Tuesday, although worries persist over President Donald Trump's tariffs. The Bank of Japan's quarterly tankan survey said an index for large manufacturers rose to plus 13 from plus 12 in March, when it marked the first dip in a year. The survey is an indicator of companies foreseeing good conditions minus those feeling pessimistic. Major manufacturers include auto and electronics sectors, whose exports to the U.S. drive the Japanese economy. U.S. auto tariffs are a worry for major manufacturers like Toyota Motor Corp., but some analysts note global auto sales have held up realatively well in recent months. The U.S. has imposed 25% tariffs on auto imports. Japanese automakers have plants in Mexico, where Trump has announced a separate set of tariffs. The U.S. has also imposed 50% tariffs on steel and aluminum. Japanese officials have been talking frequently with the Trump administration, stressing that Japan is a key U.S. ally. Trump posted on his social media site Monday that Japan wasn't buying enough rice from the U.S. 'They won't take our RICE, and yet they have a massive rice shortage,' the president wrote, adding that a letter to Japan was coming. Also on Monday, National Economic Council director Kevin Hassett told reporters at the White House that Trump 'is going to finalize the frameworks we negotiated with a whole bunch of countries after the weekend.' The Bank of Japan, which has kept interest rates extremely low for years to encourage growth, is expected to continue to raise interest rates, but some analysts expect that to wait until next year. The central bank raised its benchmark rate to 0.5% from 0.1% at the start of this year and has maintained that rate. The next Bank of Japan monetary policy board meeting is at the end of this month. The tankan findings work as important data in weighing a decision. The weak yen has raised the cost of materials for Japan at a time when the U.S. dollar has been trading at around 140 yen, up considerably from about 110 yen five years ago. A weak yen is a boon for Japan's exporters by boosting the value of their earnings when converted into yen. The tankan showed sentiment for large non-manufacturers fell to plus 34 from plus 35. That was better than some forecasts, which projected a deeper decline. The Japanese government reported last week that the nation's unemployment rate in May stood at 2.5%, unchanged from the previous month. © AP
Japan Today
29 minutes ago
- Japan Today
Shifting to Asia, Rubio meets Quad and talks minerals
US Secretary of State Marco Rubio (right) poses for a group picture with Australian Foreign Minister Penny Wong (2nd left), Japanese Foreign Minister Takeshi Iwaya (2nd right)) and Indian Foreign Minister Subrahmanyam Jaishankar By Shaun TANDON U.S. Secretary of State Marco Rubio met Tuesday with counterparts from Australia, India and Japan, shifting focus to Asia after a tenure so far marked by crises elsewhere and domestic priorities. Rubio had welcomed the foreign ministers of the so-called Quad on January 21 in his first meeting after President Donald Trump's inauguration, seen as a sign that the new administration would prioritize engagement with like-minded countries to counter China. Since then, much of Rubio's attention has been on the Middle East, with the United States bombing Iranian nuclear sites in support of Israel; on Ukraine, as Trump unsuccessfully seeks a ceasefire in Russia's invasion, and on boosting Trump's domestic priorities such as mass deportations of migrants. Welcoming the three foreign ministers, Rubio did not directly mention military concerns over China but said he sought cooperation among business and on raw materials -- also key goals for the Trump administration. Rubio told them he was focused on "diversifying the global supply chain of critical minerals -- not just access to the raw material, but also access to the ability to process and refine it to usable materials." "It's critical for all technologies and for all industries across the board," Rubio said, voicing hope for "real progress" on the issue within the Quad. China holds major reserves of several key minerals including the vast majority of the world's graphite, which is crucial for electric vehicles. Beijing has sought to impose restrictions as leverage, as the United States in turn curbs its access to semiconductors and as Trump wields the threat of punishing tariffs on both friends and foes. Trump is expected to travel to India later this year for a summit of the Quad. The four-way partnership was first conceived by late Japanese Prime Minister Shinzo Abe, who saw an alliance of democracies around China -- which has repeatedly alleged that the Quad is a way to contain it. Trump has long branded China as the top U.S. adversary, but since returning to office has also saluted his relationship with Chinese President Xi Jinping. Both the Indian and Japanese foreign ministers said that they wanted the Quad to focus on a "free and open Indo-Pacific" -- a phrasing that is a veiled allusion to opposing Chinese dominance in Asia. "We're all committed to ensure a free and open Indo-Pacific," Indian Foreign Minister Subrahmanyam Jaishankar said. "It is essential that nations of the Indo-Pacific have the freedom of choice, so essential to make right decisions on development and security," he said. Jaishankar also made clear that India would raise its strikes last month against Pakistan in response to a major attack on mostly Hindu civilians in Indian-administered Kashmir. "India has every right to defend its people against terrorism, and we will exercise that right. We expect our Quad partners to understand and appreciate that," he said. Despite shared concerns on China, the Quad members have differed on other hotspots. India has maintained a historic relationship with Russia despite the invasion of Ukraine. Both India and Japan also have historically warm relationships with Iran, whose nuclear sites the United States bombed in June in support of an Israeli campaign. © 2025 AFP
Nikkei Asia
an hour ago
- Nikkei Asia
Japan faces '30%-35%' tariff as Trump doubts deal by deadline
U.S. President Donald Trump speaks to reporters aboard Air Force One on July 1. © Reuters RYOHEI YASOSHIMA WASHINGTON -- U.S. President Donald Trump said Tuesday that he doubts a trade deal with Japan can be reached before the July 9 deadline, adding he is considering raising tariffs on Japanese imports to 30% or 35%. Speaking to reporters aboard Air Force One, Trump criticized Japan for not accepting imports of U.S. rice, as well as the imbalance in auto trade between the two countries.
