Solid profits at major Japanese companies in recent earnings reports are unlikely to translate into near-term wage hikes in broad sectors due to the risk of a global recession, dashing Prime Minister Fumio Kishida's hopes for higher pay to blunt the impact of rising prices.
The yen's drop to 24-year lows against the U.S. dollar has served as a major profit driver for some blue-chip companies, boosting profits earned overseas and inflating the value of assets held abroad in yen terms.
Companies from automakers and components suppliers to energy companies reported upbeat earnings for the April-June quarter and revised upward full-year projections, driven by the yen's slide.