Firms listed on the first section of the Tokyo Stock Exchange have reported strong performances for the April-September period, helped by government subsidies for eco-friendly cars and electronic appliances and strong exports to emerging economies. But they are likely to have a difficult time in the next half-year period, because of the threat of prolonged deflation and a rise in the value of the yen.
According to Nikko Cordial Securities Inc., 1,167 firms on the first section, excluding financial firms, registered a total current account profit of ¥13.889,6 trillion in the first half of fiscal 2010, some 2.4 times more than a year before and close to the ¥14.502 trillion registered in the first half of fiscal 2008, just before the collapse of Lehman Brothers Holdings Inc. The total sales grew 10.7 percent from a year before to ¥239.283,2 trillion.
The firms are cautious about their performance in the October 2010-March 2011 period. They expect total current account profit to grow 44.6 percent from a year before to ¥23.140,9 trillion, with the growth rate lower than in the previous half-year period. That amount would be about 70 percent of the current account profit posted for the October 2007-March 2008 period — more than a half year before the global recession triggered by Lehman Brothers' collapse.