Japanese multinationals are cashing in on a weaker yen, prompting a wave of earnings forecast upgrades in the latest reporting season. Toyota, Honda, Sony and Ryohin Keikaku have all revised their guidance higher. Okasan Securities data shows 159 of about 1,600 Topix constituents have raised full-year forecasts since July 1, versus just 12 downgrades — an adjustment ratio of 86%, the highest since fiscal 2016.
Japanese multinationals are reaping the benefits of a sharply weaker yen, with a growing number of companies lifting their earnings outlooks in the latest round of corporate results, according to Japanese media reports on August 10.
Despite recent intervention efforts by the Japanese government, markets expect the currency to remain under pressure. That has prompted companies with large overseas revenue exposure — including Toyota Motor, Honda Motor, Sony and Ryohin Keikaku, the parent of MUJI — to revise their profit forecasts upward.
According to a report from Okasan Securities, 159 of roughly 1,600 constituents in the Topix index have raised their full-year earnings expectations since July 1, while only 12 companies lowered their forecasts. The overall ratio of earnings guidance revisions reached 86%, the highest level since fiscal 2016.
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