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Toyota’s ‘Unprecedented’ Cost Surge Casts Shadow Over Japan Inc.

  • Cautious earnings outlooks risk overshadowing profit beats
  • Toyota cited struggle with high costs, supply disruptions
Toyota vehicles parked at the company's dealership in Sendai, Japan.

Toyota vehicles parked at the company's dealership in Sendai, Japan.

Photographer: Toru Hanai/Bloomberg

Halfway through Japan’s reporting season, companies are mostly hitting their marks, but some high-profile cautious outlooks from blue chips like Toyota Motor Corp. risk sapping optimism for the rest of the financial year.

Almost 60% of firms have beaten earnings estimates in the latest quarterly reports, with technology and consumer discretionary firms doing best and health-care and financial companies lagging, according to data compiled by Bloomberg. But some investors are worried the earnings recovery could soon unravel as companies such as Toyota struggle to deal with high raw material costs and supply disruptions.