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Japan's October-December corporate profits almost back to pre-pandemic level

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    Kyodo News

Tokyo, Japan   /   Tue, March 2, 2021   /   12:15 pm
Japan's October-December corporate profits almost back to pre-pandemic level People wearing face masks walk in a street in Tokyo’s Ueno area on May 27, 2020, two days after the Japanese government lifed a nationwide state of emergency. - Japan lifted a nationwide state of emergency over the coronavirus on May 25, gradually reopening the world's third-largest economy as government officials warned caution was still necessary to prevent another wave. (AFP/CHARLY TRIBALLEAU )

Japan's corporate profits in the October-December period bounced back to just below the levels seen before the coronavirus pandemic but manufacturing and nonmanufacturing industries saw a divergence in growth, government data showed Tuesday.

Pretax profits of domestic companies covered in the Finance Ministry's quarterly survey were down just 0.7 percent from a year earlier at 18.45 trillion yen ($172 billion).

While it was the seventh quarterly decline, the pace of decline slowed significantly compared to a 28.4 percent tumble in the July-September quarter.

Pretax profits by manufacturers saw the first increase in 10 quarters, soaring 21.9 percent to 7.18 trillion yen, following a 27.1 percent drop in the previous three months, with transport equipment and production machinery makers largely contributing to the surge.

In the nonmanufacturing field, profits fell 11.2 percent to 11.27 trillion yen, down for the fourth straight quarter after a 29.1 percent plunge in the July-September period. Sectors such as transportation and postal service providers led the contraction.

Corporate sales in Japan dipped 4.5 percent to 332.09 trillion yen, down for the sixth successive quarter. Sales of manufacturers slid 5.4 percent due to a poor performance by electrical machinery producers and food makers, while those of nonmanufacturers fell 4.1 percent.

Capital spending by all nonfinancial sectors for purposes such as building factories as well as adding equipment and software declined 4.8 percent to 11.08 trillion yen, down for the third straight quarter as the business outlook remains uncertain amid the pandemic.

Seasonally adjusted business investment by all nonfinancial sectors, including spending on software, edged down 0.3 percent from the third quarter of 2020 when it fell 0.7 percent. It was also the third consecutive quarterly decrease.

Taking into account the latest capital spending figures, the Cabinet Office is scheduled to release revised gross domestic product data for the same quarter on March 9.