In case you missed it, JAPAN Most Read Publications 12 May to 18 May 2026

Research evidence excerpt

In case you missed it, JAPAN Most Read Publications 12 May to 18 May 2026

and

shareholder returns, leading to strong share price performance.

Japan Equity Strategy (Rie Nishihara)

Jan-Mar earnings snapshot (70% reported): Earnings growth guidance continues, led by AI

semiconductors, banks

Jan–Mar results for TSE Prime companies that have reported so far (70% of the total) show strong earnings progress, with both

sales and profit rising, including a double-digit % YoY increase in net profit. Electronics/precision and nonferrous metals led the

profit growth, with exporter sectors such as trading companies and domestic-demand sectors including construction materials,

food, and transport also contributing positively. More than 60% of companies beat Bloomberg consensus estimates for both

sales and net profit, surpassing the past two years. Full-year FY2025 revenue and profits results were also up, with net profit

growth widening +4.5% YoY. Accounting for the US tariff impact (which we estimate trimmed aggregate net profit by 6ppts), we

think underlying profit growth exceeded 10%. FY2026 guidance projects sales and profit growth despite high oil prices, with net

profit to rise 11% YoY, well above corporate forecasts in the March Tankan survey (net profit for large enterprises/all industries

–2.5% YoY) and the past five-year average (–1.5%). Strong guidance in AI semiconductors (electronics/precision firms forecast

a 60% YoY increase in net profit) and banks (up 30%) contrasted with cautious guidance for lower profits from autos, steel, and

energy (which are feeling the impact of Middle East tensions and higher oil prices). Companies’ average forex assumption of

¥151/$ is stronger than current levels, leaving room for potential for upward revisions to guidance.