Japan Corporate Profits

In the October-December quarter of 2016, corporate profits among Japanese companies increased by 16.9% year on year, supported by the surging 25.4% growth for manufacturers.

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

Published quarterly by the Ministry of Finance. Updated till the quarter of October-December 2016 (published on March 1st, 2017).

Recent data trend:

The corporate profit in Japan for the October-December quarter rose by 16.9% on a year on year (YoY) basis, the highest growth recorded in the past 5 quarters. Profits from manufacturers rose by 25.4% YoY, recording a first positive YoY growth since the April-June 2015 quarter. Non-manufacturers' profits grew by 12.5% YoY. After a seasonal adjustment, total current profit for Japanese companies are 19.77 trillion yen, setting a new historical record. 

The increase in corporate profits seem to owe much to the weaker yen and a recovery in global demand in the fourth quarter of 2016. In the fourth quarter of 2016, exports as a component of real GDP grew by 4.7% YoY, accelerating from the 1.0% YoY growth in the previous quarter. 

Capital investments by Japanese companies also recovered in the fourth quarter of 2016. Capital investment excluding software rose by 3.3% YoY in the quarter, up from -1.4% YoY in the previous quarter. However, even after the recovery, the growth rate seems rather weak, when we compare the growth rate with the prevailing growth rate in 2015. At the peak in the third quarter of 2015, capital investments excluding software was growing at the rate of 11.2% YoY. While the business condition in Japan seem to have shown some recovery at the end of 2016, owing much to external factors, Japanese corporate managers seem yet cautious in their outlook, judging from the reluctance to expand their investments.

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: June 1st, 2017

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