Combined pretax profits of major Japanese companies are projected to take the first double-digit fall in five years in the current business year that ends March 31, according to earnings estimates released by the nation's main think tanks.
In forecasts made by Tuesday, the Daiwa Institute of Research, the Nikko Research Center and the Nomura Research Institute all predicted deteriorating profitability in a wide range of industries from machinery to steel, citing sagging prices of products and commodities due to slack domestic demand and the Asian economic turmoil.
The margin of decline was projected at 14.7 percent by Daiwa, 13.5 percent by Nikko and 11.2 percent by Nomura. All projections were larger declines than their projections in June.
The earnings projections do not include banks and other financial institutions. Nomura has forecast that the government will be forced to take additional pump-priming measures to rev up the stagnant economy.
For the fiscal first-half period to Sept. 30, declines from a year earlier were forecast at 27.3 percent by Daiwa, 24.9 percent by Nikko and 25.4 percent by Nomura.