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Nikkei: Pretax profit at listed firms up 10.9% in first half of FY2008

December 3, 2007
By Ken Worsley


A few weeks back, we saw the Nikkei predicting that Japan’s listed firms would post a 5.7% increase in pre-tax profits for fiscal 2008. For that prediction to come true, they’re going to have to have a pretty bad second half of the year.

In Saturday’s edition of the paper, the Nikkei reported that “combined pretax profits at publicly traded companies soared 10.9% in the first half [of the financial year] ended in September.”

While the Nikkei’s numbers exclude startups and financial firms, we do see an obvious trend with manufacturers seeing a 14.1% increase in pretax profit, while non-manufacturers were limited to an increase of 5.4 percent.

The winners: electronic-appliance firms (+22.7%), precision-equipment manufacturers (+22%), and automakers (+18.4%). All exporters who loved that cheap yen.

On the other side of the coin were electricity and gas providers, who saw a 21.9% fall in pretax profit due to higher oil costs, construction companies (-8.5%), and retailers (-4.1%).

The question now is how long the stronger yen will last. Will the Fed be raising US rates again, thereby putting further downward pressure on the dollar? Could we possibly see both manufacturers and nonmanufacturers head into negative profit growth territory for the October-March half of fiscal 2008?

Filed Under Business, Finance, Nikkei 

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Comments

4 Responses to “Nikkei: Pretax profit at listed firms up 10.9% in first half of FY2008”

  1. Yarrik on December 3rd, 2007 11:19 am

    Sounds like we’re in for a rough last two quarters. The exporters are bound to be screaming over the exchange rate and I don’t think Mr Fukui can get through his final interest rate hike! That won’t make him happy.

  2. James on December 3rd, 2007 1:51 pm

    Great job on the new site design!

  3. David on December 3rd, 2007 8:52 pm

    It is interesting to see that with this result, Keidanren has now come out and suggested that it’s members increase wages next year.

  4. Ken Worsley on December 3rd, 2007 9:33 pm

    “As the economy becomes more robust and corporate performances improve, those effects should cross over to the household sector.”

    Keidanren Chairman Fujio Mitarai, December 2006

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