Japan Corporate Profits

Corporate profits once again renewed its historical high.

Note: Total and Non-Manufacturing does not include Finance and Insurance.

Published quarterly by the Ministry of Finance. Updated till the quarter of January-March 2017 (published on June 1st, 2017).

Recent data trend:

Corporate profits in Japan rose robustly by 26.6% year on year (YoY) in the January-March quarter of 2017. Profits from manufacturers were up by an eye-popping 70.3% YoY. After a seasonal adjustment, corporate profits in Japan again renewed its historical high at over 20 trillion yen (USD180 billion) per quarter. 

Corporate profits in Japan suffered a slump between mid-2015 to early 2016, but the recovery since mid 2016 has completely recouped the loss with some extra to add. The gain in profits since mid-2016 was chiefly driven by manufacturers and exporters. Real exports growth has accelerated from -1.4% YoY in the January-March quarter of 2016 to 6.1% YoY in the same quarter of 2017. Net exports, exports minus imports, contributed a half of Japan's GDP growth of 1.6% YoY in the quarter. Exchange rates must have also helped Japanese exporters. Yen has depreciated from 101 Yen per USD in September 2016 to 111 Yen per USD in May 2017.    

Japanese companies seem still cautious on making capital investments despite the record profit though. Capital investments did rise by 4.5% YoY in the latest quarter, but the rate of growth is rather disappointing. In a typical boom period, capital investments tend to grow well over 10% YoY, acting as a fuel for further growth. While the business conditions in Japan seems to continue to improve, the timidity of capital investment shows that Japanese corporate managers remain yet cautious in their longer term economic outlook.

Brief overview of “Corporate Statistics”:

Corporate statistics, published as "Surveys for the Financial Statements Statistics of Corporations by Industry” by the Ministry of Finance, is the survey about the financial condition of commercial corporations in Japan. 

Sales of all industry excluding finance and insurance in 2012 was 1,297 trillion yen, and Investment excluding software in 2012 was 34.6 trillion yen.

These statistics are used for estimating private non-residential investment of second preliminary quarterly GDP report.

Note: The seasonally adjusted series for Sales, Current Profit and Investment excluding software is published by the Ministry of Finance. The seasonally adjusted series for Capital Investment are our own. We used X13-ARIMA-SEATS developed by U.S. Census Bureau with log transformation and automatic outlier detection options turned on.

For more information, visit the official government page

The Next Release Date: September 1st, 2017

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