Japan trading companies: Investment perspective

Research evidence excerpt

Japan trading companies: Investment perspective

Global Markets Research

Japan trading companies: Investment perspective 17 July 2026

EQUITY: JAPAN TRADING COMPANIES

Research Analysts

Underlying earnings holding up well Japan trading companies

Yasuhiro Narita - NSC

Rising resource prices and weaker yen were likely tailwinds for underlying yasuhiro.narita@nomura.com

profits +81 3 6703 1205

Sector share prices have fallen on expectations for end to conflict in Middle East,

the situation remains difficult to gauge

Trading companies performed well relative to the TOPIX through March 2026 on

expectations for inflation driven by interest rate cuts in the US from 2025 and expectations

for earnings to improve on rising prices for energy sources such as crude oil and LNG as

a result of the conflict in the Middle East. Performance has been weaker since April,

however, on expectations for an end to the conflict in the Middle East and a decline in

commodity prices caused by concerns about rate hikes in the US in response to renewed

inflation. The business environment remains highly uncertain, with US–Iran tensions

flaring again. While the rise in energy prices caused by the protracted conflict in the

Middle East has favorable implications for earnings at trading companies, a sharp rise in

sector share prices seems unlikely, given the difficulty in gauging the sustainability of

these elevated energy prices.

We estimate solid underlying profits in Q1, but see limited impact on share prices

Companies are scheduled to release 27/3 Q1 results soon, and we estimate that profits

attributable to owners of the parent reached 20–29% of full-year guidance. While trading

companies are planning to book transitory gains in 27/3, we are not factoring in the gains