Japan Manufacturers’ Pretax Profits Plunge in April–June as U.S. Tariffs Bite

Pretax profits at Japanese manufacturers fell 11.5% in the April–June quarter from a year earlier to 11.27 trillion yen ($76.5 billion), dragged down by automakers hit by higher US tariffs, government data showed, Kyodo News reported.

Manufacturers boosted investment by 16.4%, particularly in the transportation equipment and food sectors.

The transport equipment sector posted a 29.7% decline, but overall pretax profits—including those of non-manufacturers—edged up 0.2% to a record 35.83 trillion yen, the Finance Ministry said.

Non-manufacturers alone booked record pretax profits of 24.57 trillion yen, up 6.6%, led by the services and delivery/postal sectors, driven by higher demand at entertainment venues and hotels.

Capital spending across all nonfinancial sectors rose 7.6% to 12.82 trillion yen, marking the second consecutive quarter of growth. Manufacturers boosted investment by 16.4%, particularly in the transportation equipment and food sectors, expanding production capacity.