Major Japanese companies are expected to see their combined net profits for the year ending March to surpass 47 trillion yen ($312 billion) and hit a fresh record-high, a survey showed Monday, as economic activity continues to recover from the coronavirus pandemic and exporters receive a boost from a weak yen.
Strong performances among the country's blue-chip firms have apparently been a factor behind money being drawn in from foreign investors, pushing the benchmark Nikkei stock index up to all-time highs since late last week.
The net profits of 1,430 companies listed on the Tokyo Stock Exchange -- most of them in its top-tier Prime section -- are estimated to total 47.06 trillion yen in the current fiscal year, up 12.9 percent from a year earlier, according to a tally by SMBC Nikko Securities Inc.
The projection suggests that aggregated net profits will book a record high for the third straight year.
Among manufacturers, combined profits are expected to rise 15.7 percent from a year earlier. Non-manufacturers are estimated to book an 8.3 percent growth in profits, although if the electricity and gas sector, which has benefited from higher utility prices, is excluded, they would see a 3.7 percent drop.
By industry, the air and land transportation sectors expect to see rises in profits of 67.6 percent and 15.2 percent, respectively, as travel demand bounces back on receding fears of the COVID-19 pandemic.
The total profits of transportation equipment firms, including automakers, are projected to jump 63.3 percent on the back of a weak yen against the U.S. dollar, which boosts exporters' profits when repatriated.
The insurance sector's total profits are slated to more than double, as payouts for insurance claims linked to the pandemic have started to dwindle.
Of the 140 companies that have downgraded their business forecasts, 19 belonged to the chemical sector, which expects a 10.8 percent decline in profits due to deteriorating market conditions.
The marine transportation industry is expected to suffer a 77.4 percent drop amid concerns over tensions in the Middle East.
Hikaru Yasuda, chief equity strategist at SMBC Nikko Securities, attributed the overall strength of the companies to their having been able to pass on costs by raising prices, alongside declining raw material costs.
