Economics
Trouble Looms for Japan Earnings After Worst Decline Since Quake
- After terrible quarter, outlook for annual profit gain dimming
- Stronger yen hammers manufacturers, while rates stymie banks
Japanese Firms to Revised Full-Year Forecasts
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After first-quarter earnings in Japan wrapped up this month with the steepest plunge since 2011, the prospect for an increase in annual profits is about to get even dimmer.
Expect a round of corporate earnings downgrades in September, said Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities. Trends that slammed profit in the first quarter -- a stronger yen, negative interest rates and slumping China growth -- haven’t reversed. At stake is a second straight year of earnings decline that could bury Prime Minister Shinzo Abe’s push for companies to boost capital spending and raise wages to spur economic growth.