U.S. Tariffs Force Pause in Japanese Corporate Profits Growth
(MENAFN) The Japanese government announced on Wednesday that the upward momentum in corporate profits is "pausing" as higher U.S. tariffs on automakers and manufacturers weigh on earnings.
In its August monthly report, the Cabinet Office cited, "The effects caused from the U.S. trade policies and so on are seen in some areas," prompting a downgrade in its corporate earnings outlook—the first in eight months.
Just last month, the Cabinet Office had noted profits were on the rise but warned, "attention should be given to the effects of trade issues."
Despite this, the report reaffirmed its overall assessment that the domestic economy continues "recovering at a moderate pace," buoyed by robust business investment, especially in digitalization efforts among non-manufacturing sectors.
Exports remained "almost flat," leading the Cabinet Office to keep its evaluation unchanged from July.
On private consumption, a crucial driver representing over half of Japan’s economy, the report sustained its previous outlook while acknowledging that "the improvement in consumer sentiment is slow."
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