Mizuho: Despite uncertainty in the Middle East, Japanese corporate profits continue to show resilience

According to Golden Ten Data on July 1, Mizuho Securities economist Ryosuke Katagi stated that despite global geopolitical risks, Japanese companies' profit plans continue to demonstrate resilience. The Bank of Japan's Tankan survey released on Wednesday shows that companies of all industries and sizes expect a 6.5% decline in recurring profits for the current fiscal year, whereas the previously published March survey projected a 2.4% decline. Ryosuke Katagi said that this revision is in line with normal seasonal patterns. He noted that the data matches the forecast for the previous fiscal year as of June 2025, indicating that so far, the Middle East conflict has not significantly impacted profit outlooks. He added, “These revisions need to be closely monitored, as corporate earnings for this fiscal year will influence the 2027 spring wage negotiations.”