Japanese companies' April-June earnings substantially exceeded market expectations, with profits improving not only among AI-related stocks but also in domestic-demand and materials-related sectors. Pricing effects have kept profitability firm, raising the possibility that investor interest will spread to a broader range of stocks.
According to Bloomberg's compilation, 71.3% of TOPIX constituents reported net income above analyst expectations in April-June, the highest level in five years. Aggregate net income for TOPIX 500 companies reached ¥21 trillion, surpassing the peak recorded in July-September 2025 to set a new record.
Although concerns about the impact of the Middle East crisis emerged before the earnings announcements, companies maintained and improved profitability through price increases, and both export-oriented and domestic-demand companies reported results above expectations. Profit margins reached 9.3%, the highest level since 1993.
Among semiconductor-related companies, Advantest and Tokyo Electron reported results above market expectations, and their share prices also rose. Among domestic-demand companies, strong results from Nitori Holdings, LINE Yahoo and オオツカ商会 stood out. Most sectors posted higher profits, although some airlines and power companies reported declines.
Against a backdrop of market expansion and resilient earnings, analysts say investor interest is likely to spread more broadly than before, while the impact of AI-related demand may continue to extend across a wide range of industries.