WNAM REPORT: Japanese nonfinancial companies’ combined ordinary profits in April-June grew 13.2% from a year before to ¥35,768 billion, a record high since comparable data became available in April-June 1954, the Finance Ministry said Monday.
In the first quarter of fiscal 2024, the combined profits rose for the sixth consecutive quarter, with both the manufacturing and nonmanufacturing sectors posting record-high profits on the back of the yen’s historic depreciation and progress in passing on higher costs to consumers.
Manufacturers’ profits rose 13.0% to ¥12,729.4 billion, reflecting brisk overseas sales of transportation equipment, as well as the yen’s weakening, which pushed up profits in yen terms.
Nonmanufacturers’ profits went up 13.3% to ¥23,038.6 billion, as services providers, including restaurants, saw their profits grow significantly thanks to a recovery in the number of customers and the effects of new store openings.
Nonfinancial companies’ combined capital expenditures climbed 7.4% to ¥11,916.1 billion, up for the 13th straight quarter. In response to increased demand for semiconductors and other products, companies in the information and telecommunications machinery and electric machinery sectors stepped up investment to increase their production capacities.
Meanwhile, nonfinancial companies’ internal reserves at the end of fiscal 2023 grew 8.3% from a year earlier to ¥600,985.7 billion, topping ¥600 trillion for the first time and rewriting the record high for the 12th year in a row on the back of brisk corporate earnings.
The ministry said that the survey results show that the Japanese economy is recovering moderately.
“We will closely watch the trend of corporate activities, including how they are affected by overseas economic slowdowns and rising prices,” a ministry official said.
