While TOPIX EPS in FY2026 is expected to rise 11.6% year on year, initial company plans assume ordinary profit growth of approximately 2–3%. A Nomura Securities strategist reviews trends in energy input ratios, key points by sector, and the outlook ahead of earnings announcements.
TOPIX EPS in FY2026 is expected to rise approximately 11.6% year on year, while listed companies’ initial plans assume ordinary profit growth of approximately 2–3%. The foreign-exchange assumptions are USD/JPY in the ¥148 range and EUR/JPY in the ¥170 range. If current exchange-rate levels persist, there may be room for upward revisions, although persistently high crude oil prices could put downward pressure on profits.
Based on the relationship between the Tankan survey released on 2 April and the initial plans of listed companies, ordinary profit growth in FY2026 is expected to vary by sector. Glass and ceramics, paper and pulp, construction, retail, and real estate are more likely to post profit growth, while fabricated metals, textiles, electrical equipment, and wholesale are more likely to post profit declines. However, given the macroeconomic environment, the impact of higher crude oil prices warrants attention.
The revision index remains slightly positive, while the implied revision index turned negative after the end of March but has since recovered into positive territory. Optimism remains on expectations of a ceasefire, although excessive optimism is being avoided.
Companies with February year-ends achieved revenue growth of 2.7% and ordinary profit growth of 4.3% year on year in FY2025, and forecast revenue growth of 6.0% and ordinary profit growth of 6.3% for FY2026. Approximately 73% of the total and slightly more than 10% are expected to increase their dividends, while profit growth is generally expected to remain in the low single digits.