Toyota Leads Japan’s Auto Earnings Season Amid U.S. Tariff Relief

Toyota Motor Corp. officially launched Japan’s automotive earnings season following former President Donald Trump’s recent directives that eased tensions surrounding U.S. tariffs. This shift has calmed investors who were concerned about potential trade barriers.

Strong sales drive profit growth

According to Bloomberg Intelligence, Toyota likely saw an increase in operating profit during the fiscal fourth quarter, driven by strong sales in Japan, the United States, and China. However, analysts warn of potential tariff-related challenges in the current fiscal year. CLSA analyst Christopher Richter noted that Toyota may be less exposed to these risks than its industry peers.

Brussels Launches Diplomatic Offensive to Revive Trade Talks with the U.S.

Next week, the European Union will deliver a comprehensive trade proposal document to the United States…

U.S. exports remain crucial

Japanese auto exports to the United States account for roughly 1% of Japan’s GDP. North America remains the top destination for Japan’s five major automakers, making up 30% of Toyota’s global sales last year. Japan’s chief trade envoy, Ryosei Akazawa, described the latest round of talks in Washington as “frank and constructive,” and announced that negotiations will resume in mid-May.

Nintendo faces tariff-related pricing pressure

Nintendo Co. may face challenges with its much-anticipated Switch 2 console due to tariff pressures. Despite strong preorders in Japan and the U.S., a potential 46% tariff on imports from Vietnam could force the company to raise prices or absorb losses, according to Morningstar analyst Kazunori Ito.

Mitsubishi Heavy benefits from defense spending

Mitsubishi Heavy Industries Ltd. is positioned to benefit from rising defense spending and Japan’s strategy to revitalize its nuclear energy sector. Additionally, a continued recovery in Boeing 787 deliveries could further boost the company’s performance beyond the current fiscal year.