TOKYO (AFP) - Major Japanese firms wrapped up the latest earnings season on a high note, more than doubling their net profit in the three months to June, a new report showed on Monday.
Brokerage SMBC Nikko Securities said its review of company financial results showed combined net profits surged about 112 per cent from the April-June quarter a year earlier, while operating profit jumped 33 per cent among some of Japan Inc's biggest names.
A pick-up in consumer spending and a sharp decline in the yen, which makes exporters such as Toyota and Sony more competitive overseas, were behind the booster profits, the company said.
"The profit gains were mainly due to a positive effect of the weak yen," said SMBC Nikko Securities analyst Kayoko Ota.
"Recovering domestic demand and steady growth in North America were also major factors."
Ms Ota also said the good times were likely to last with many firms raising their fiscal full-year to March profit and sales forecasts.
"They're expected to stay on course to recovery," she added.
The SMBC report, which looked at nearly 500 companies on Tokyo's broad-based Topix index, found that manufacturers saw the biggest rises in profit.
Toyota's earnings almost doubled to a record US$5.64 billion (S$7.1 billion) in the quarter, with the firm on track to produce over 10 million vehicles worldwide this year, it said.
The world's biggest automaker has ramped up its bid to tap emerging markets while key US demand has also been on the upswing, helping Toyota book ever-increasing profits over the last year.
The Camry and Corolla maker, like rivals Honda and Nissan, benefited from a slump in the Japanese currency since late last year as it inflates the value of income earned overseas when it is converted back into yen.
The cheaper yen also helped Toshiba swing back to profitability in the quarter, while Japan's top three banks booked gains as a surge in the stock market boosted their trading businesses and investment holdings.