Total Net Profit of Listed Firms Seen to Decline in Interim Results Amid Tariffs, Rising Prices

By Itsuki Okuda and Yusuke Fukuhara / Yomiuri Shimbun Staff Writers

7:00 JST, November 16, 2025

Interim earnings announcements for fiscal 2025 by companies listed on the Tokyo Stock Exchange peaked on Friday. Hit by a prolonged period of price increases and the high tariff policies of the administration of U.S. President Donald Trump, their total net profits are expected to decline for the interim period for the second year in a row.

Lingering Thriftiness

SMBC Nikko Securities Inc. compiled results for 948 companies (or 92.2% of the total) included in the TOPIX index (excluding financial firms and SoftBank Group) that had announced their earnings by Thursday. The total net profit of these companies stood at ¥19 trillion, down 2.5% for the same period last year.

Apparently impacted by U.S. tariffs, profit deterioration was noticeable, particularly in export-oriented industries, with all seven major automakers posting either reduced profits or losses.

Toyota Motor Corp., which posted declining profits for the second consecutive year, saw U.S. tariffs push down its operating profit — the core indicator of business performance — by ¥900 billion. This is expected to reduce its annual profit by ¥1.45 trillion. Its efforts to expand sales volume and improve costs have been offset by the tariffs.

Mitsubishi Motors Corp. and Mazda Motor Corp. posted net losses for the first time in five years, since the interim period ending in September 2020, during the COVID-19 pandemic.

Even though the tariffs were eventually mitigated by a Japan-U.S. agreement, Mazda CFO Jeffrey Guyton lamented that the impact of the U.S. duties on results is quite significant.

Increasing prices over a lingering period are also creating adverse winds for companies. Yakult Honsha Co., which announced its interim consolidated results on Friday, saw its net profit decline for the first time in two years, due to a sales drop of its lactic acid bacteria drinks amid rising prices.

Managing Executive Officer Shuichi Watanabe noted, “The rise in prices has led to consumer thriftiness for a prolonged period.”

Brisk sales of Switch 2

Meanwhile, against the backdrop of generative AI penetration, investment in data centers is expanding, fueling a boom for semiconductor-related companies.

Kyocera Corp., which manufactures substrates used in servers, saw profits in its semiconductor-related division more than triple from the same period last year. President Hideo Tanimoto expressed confidence, saying, “Demand related to data centers is extremely brisk.”

The entertainment industry, in which the country holds an international competitive edge, is also performing well. Nintendo Co. saw robust sales of its Nintendo Switch 2 home console, boosting its net profit by 80%.

Signs of Improvement

For the current fiscal year ending March 2026, the impact of U.S. tariffs is expected to weigh heavily, with total net profits for all companies projected to decline by 8.8% year-on-year, the first decline in five years.

However, as of Thursday, among companies that disclosed their earnings forecasts for this fiscal year, 273 companies, nearly 30% of the total, have revised their net profit projections upward, while 118 companies made downward revisions. This pattern indicated a growing perception that the business environment has improved since their initial projections were made.

The main factors are the resolution of Japan-U.S. negotiations, which led to a reduction in U.S. “reciprocal tariffs” to 15% against Japan, and the shift in the exchange rate toward a weaker yen and a stronger dollar since around the time when Prime Minister Sanae Takaichi took office, lessening headwinds for sectors such as manufacturing.

Hikaru Yasuda of SMBC Nikko said, “The uncertainty surrounding U.S. tariffs has receded compared with April. If the current exchange rate level [of around ¥155 per dollar] persists, the total full-year net profit for all companies could potentially turn positive compared with the previous year.”