Japanese firms are starting the earnings season with an increasingly bleak outlook as the failure of U.S. peace talks with Iran drives crude oil prices higher.
Equity analysts downgraded their earnings forecasts in 113 cases among Topix 500 companies last week through Thursday. This is the first time since July that downgrades have exceeded upgrades.
Japan¡¯s chemical manufacturers and other oil-dependent sectors face extreme vulnerability as the Strait of Hormuz remains largely blocked, obstructing the single waterway that provides more than 90% of the nation¡¯s crude oil imports. A surge in oil prices has prompted Nomura Securities to cut its earnings forecasts for companies including Kao and Unicharm.
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