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Japanese business outlook is, if anything, bleak. The largest companies of the nation are starting to announce earnings this week, but analysts do not expect a clear picture at all. Optimism is scarce, especially because “predicting future profits is difficult, if not impossible”, according to Reuters.
Japanese investors are used to work with business forecasts for a full year ahead, but now they have to start guessing. Analysts are themselves struggling to get a clear picture of future demand, because some companies already said they will not make any forecasts for this year.
"Earnings season is here and we want to focus on outlooks for the current year, but it may be only a minority of companies that can provide one," said an official of Daiwa Securities Group quoted by Reuters.
Among the big companies to have announced earnings by the end of the week are Nintendo, Honda and Canon.
One of the few overall business forecasts for this year belongs to Barclays Capital, which thinks the average net profit of all firms floating on the Tokyo Stock Exchange’s first section will fall by 12 percent. The largest contributor to the fall is expected to be export depending industries, such as auto and electronics.
Reuters-gathered data also indicates that in the last month the average profit estimations of analysts across all business sectors dropped by 6 percent, with the biggest decrease in the utility sector, at 37 percent, in a large part due to Tokyo Electric Power’s current crisis. [Reuters]