Pretax profits at Japan companies hit record high in April-June

Sep 01 (Nikkei) - Pretax profits among nonfinancial Japanese companies jumped 17.6% from a year earlier to a record 28.32 trillion yen ($203 billion) in the April-June quarter, government data showed on Thursday, boosted by a weak yen and the waning impact of the COVID-19 pandemic despite surging commodity prices.

Capital spending gained 4.6% to 10.61 trillion yen, rising for a fifth straight quarter, after companies sought to increase output capacity and add equipment to cope with a recovery in demand, according to finance ministry data.

Japan's economy has been recovering, helped by the lifting of COVID curbs that had dealt a blow to the services sector. A sharp drop in the yen's value has also benefited big manufacturers, though it has inflated import costs for energy, raw materials and food, boding ill for the resource-poor nation.

Both the manufacturing and services sectors reported record pretax profits. Manufacturers saw an 11.7% year-on-year jump to 11.23 trillion yen while nonmanufacturers logged a 17.09 trillion yen profit, the ministry data showed. Capital expenditure by manufacturers surged 13.7% to 3.86 trillion yen, which compares with zero growth in the nonmanufacturing sector at 6.75 trillion yen.

Source: ANNnewsCH

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