Japan Inc’s third-quarter profits fell at the sharpest rate since the 2011 Fukushima earthquake and tsunami as companies faced an abrupt slowdown in China’s economy owing to the US trade dispute.
Following years of robust growth under Prime Minister Shinzo Abe’s pro-business economic policies, Japanese companies were also hit by global growth fears that have also affected technology giants such as Apple and Intel. A series of downgrades in annual profit forecasts by Nidec, Panasonic, Fanuc and other manufacturers were accompanied by warnings about the lack of clarity about when a recovery would happen.
According to SMBC Nikko Securities, 1,014 of companies in the benchmark Topix index reported third-quarter operating profit that was 2.6 per cent lower than the same quarter last year. That was the biggest percentage fall since the 2011-2012 fiscal year when the March 11 earthquake and tsunami disrupted supply chains worldwide, according to SMBC.
In Asia-Pacific equities, futures tip Sydney’s S&P/ASX 200 index to shed 0.2 per cent at the open, while Hong Kong’s Hang Seng is expected to drop 0.4 per cent when trading begins. Tokyo traders are off for the National Foundation Day holiday.
The economic calendar for Monday is quiet—too quiet (all times Hong Kong):
- 12.00: Malaysia industrial production
- Foreign exchange reserves figures for China and Hong Kong are also slated for release today.