Japanese Listed Companies' Net Profit from April to September Hits 245 Trillion Yen... "Highest for 4 Consecutive Years"

Financial Sector Booms Due to Interest Rate Hikes and NISA Activation

According to a report by Nihon Keizai Shimbun (Nikkei) on the 21st (local time), the net profits of Japanese listed companies for the first half of the 2024 fiscal year (April to September) have set a record high for the fourth consecutive year.

Nikkei compiled the performance results of 1,074 listed companies (excluding subsidiaries) that announced their first-half financial results by the 19th of this year. The total net profit increased by 15% compared to the same period last year, reaching 27.2 trillion yen (approximately 245 trillion won), marking the highest record for four consecutive years.

Nikkei pointed out that the financial sector's strong performance, driven by rising interest rates and the revised Nippon Individual Savings Account (NISA) tax exemption system implemented this year, was a major factor behind the earnings growth. The combined net profit of Japan's three major mega banks?Mitsubishi UFJ Bank, Mitsui Sumitomo Bank, and Mizuho Bank?increased by 36% to 2.5495 trillion yen, recording the highest profit for two consecutive years since the 2005 fiscal year.

The shipping industry also saw net profits increase 2.1 times due to a sharp rise in container ship freight rates. The railway and bus sectors experienced a 24% increase in net profits, supported by increased demand from inbound tourists (foreign tourists visiting Japan).

On the other hand, net profits in the manufacturing sector decreased by 6% during this period. This is the first decline in manufacturing net profits in four years, attributed to the economic downturn in China and other countries. In particular, the automotive industry's net profit decline was the largest among all sectors, amounting to 1.2 trillion yen (approximately 10.8 trillion won).

In the case of Nissan Motor, net profit plummeted by 94%, which is interpreted as a result of Japanese automakers losing out to low-priced Chinese electric vehicles and intensified price competition in the U.S. market. Steelmakers such as Nippon Steel also showed sluggish performance due to China's steel overproduction.

Mamoru Shimode, Chief Strategist at Resona Asset Management, analyzed, "Considering the manufacturing sector's sluggishness, the global economic recovery will be slow. The key will be how much the next Trump administration can stimulate the U.S. economy, but there are negative aspects such as the consideration of tariff increases, so the outlook is not optimistic."