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BOJ: Oil Shock First, Inflation Above 2% Later
The Bank of Japan says a Middle East oil shock will slow growth before inflation climbs back above 2%, a two-act forecast that gives megabanks, Nissan and Eisai plenty to argue about before the market even opens.
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Tokyo equities softened while the 10Y JGB yield held steady.
Sourced from Nikkei, JPX, BOJ, MOF - values, not commentary.
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The BOJ's Inflation Bet
BOJ Outlook: Core Inflation to Clear 2% Later This Fiscal Year as Oil Prices Slow Growth First
The Bank of Japan's quarterly outlook, released Monday, describes an economy squeezed by a near-term oil shock that will still leave core inflation running clearly above 2% in the second half of the current fiscal year. The central bank's own risk assessment tilts upside: policymakers flagged the chance that prices could deviate even higher than their central projection, driven by wage pass-through, AI-linked chip costs and a weaker yen. That combination pushed the Bank to trim its near-term forecast for the current fiscal year, a revision it attributes to the government's summer energy subsidies rather than to any cooling in underlying demand.
Why it matters: A central bank confident enough to flag upside inflation risk, even while an oil shock slows growth first, is a central bank keeping its options open on further rate moves rather than closing them. That reading shapes JGB yields, the yen and what companies budget for financing costs over the next year.
What to watch: The Bank ties the acceleration to the second half of the fiscal year, so the next several inflation prints carry outsized weight for whether the BOJ's confidence proves right or premature.
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Earnings Season's Biggest Movers
MUFG's Quarterly Profit Jumps 48% While Its Full-Year Target Stays Put
Mitsubishi UFJ Financial Group's net profit attributable to shareholders rose 48.2% year-on-year to ¥809.4bn in the quarter to June 2026, and ordinary profit, the bank's preferred measure of core earnings, climbed 57.8% to ¥1.12tn on ordinary revenue up 20.1% to ¥3.91tn. Earnings per share rose to ¥71.77 from ¥47.55 a year earlier, and total assets stood at ¥433.91tn at the end of June, up from ¥431.73tn at the end of March.
The catch: None of that moved management's plan. MUFG left its annual profit target and its ¥96.00-per-share dividend forecast exactly where they stood before the results landed, a sign that trading and equity gains, not a durable shift in the earnings run rate, did the heavy lifting this quarter.
Nissan Swings to a ¥77.9bn Profit, But the Cash Keeps Draining
Nissan's numbers finally moved in the right direction. The automaker posted a consolidated operating profit of ¥77.9bn for the quarter ended June 2026, a swing of ¥157.0bn from an operating loss of ¥79.1bn a year earlier. Net sales rose 9.5% to ¥2.96tn, and net profit attributable to shareholders came in at ¥3.8bn, recovering from a ¥115.8bn loss.
The catch: The turnaround has not fixed the balance sheet. Net cash fell ¥201.2bn during the quarter, and the dividend forecast stays at zero. Cost cuts and currency tailwinds bought Nissan a profitable quarter; they have not yet bought it cash to spare.
Eisai's Alzheimer's Drug Leqembi Grows 27% as Quarterly Profit Jumps 26%
Eisai's first quarter, the three months to June, saw revenue rise 15.6% to ¥234.33bn and operating profit climb 19.2% to ¥24.73bn, with net profit up 26% to ¥18.24bn. Leqembi sales in the Americas rose 71%, though a pullback in China tied to last year's distributor stocking held back the drug's overall growth to 27%.
Read-through: Eisai left its full-year targets of ¥883.5bn revenue and ¥70.0bn operating profit untouched, the same guidance it set on 15 May.
Commodity Prices and a Chiyoda Deconsolidation Push Mitsubishi Corp's Quarterly Profit Up 47%
Mitsubishi Corporation's net profit rose 47.0% year-on-year to ¥298.5bn in the quarter to June, with revenue up 22.8% to ¥5.18tn and pretax profit up 53.4% to ¥388.0bn. Comprehensive income jumped more than fourfold to ¥445.3bn from ¥101.4bn.
Zoom out: Part of the gain came from removing engineering contractor Chiyoda Corporation from consolidated accounts and booking a revaluation gain. The full-year profit target held steady at ¥1.10tn and the dividend forecast stayed at ¥125 a share.
Bain and LINE Yahoo Top Kamgras 1's Bid for Kakaku.com With ¥3,520-a-Share Counteroffer
Bain Capital and LINE Yahoo offered ¥3,520 a share on 29 July, or ¥3,640 with a side agreement locking KDDI out of tendering its stake, topping the ¥3,450 a share Kamgras 1 had offered.
The move: Kamgras 1 extended its own tender offer to 17 August while Kakaku.com's board weighs which bid to recommend.
Seven & i's ¥400bn Buyback Comes With a Price Tag Set Later
Seven & i Holdings landed ¥100,300 short of its ¥400bn share-buyback ceiling in a single Tokyo Stock Exchange trade on August 3, and nearly ¥367bn of that deal carries a placeholder price that SMBC Nikko Securities will true up later against the stock's future trading average.
quick hits
Quick Hits
Fuel Costs Erase Most of Japan Airlines' Profit Despite Higher Fares
Read moreJapan Airlines lifted quarterly revenue past ¥523bn on higher fares, but a 58% jump in jet-fuel costs and a weak yen cut EBIT by 72% to ¥12.7bn, even as the airline carried fewer paying passengers than a year earlier.
Shionogi Books 90% of Its First-Half Profit Target in One Quarter
Read moreA string of drugmaker acquisitions, not stronger underlying sales, pushed Shionogi's quarterly net profit up 148% to ¥97.7bn, covering most of its own first-half profit guidance within three months while cutting its cash pile by more than half.
NH Foods' Meat Pricing Power Offsets a Processed-Food Cost Squeeze
Read moreNH Foods' fresh-meat unit raised import prices fast enough to drive a 19.5% jump in quarterly business profit, but its processed-foods segment lost 13.9% of its profit to a Middle East-linked raw-material cost spike, even as net profit slipped 5.6%.
Otsuka Corporation Lifts Full-Year Profit Guidance After a Fourth Straight Record Interim Result
Read moreOtsuka lifted its full-year sales target to ¥1.38tn and raised its annual dividend to ¥105 per share, citing steady enterprise demand for AI, security and productivity software even as management flagged Middle East and US trade risks.
Nippon Light Metal Raises Profit Forecast and Dividend on Chip-Equipment Demand
Read moreNippon Light Metal Holdings raised its full-year operating profit target 22% to ¥33bn and lifted its dividend to ¥110 a share, citing recovering orders for aluminum plates used in semiconductor manufacturing equipment and sustained lithium-ion battery material sales.
JPMC Cancels Its Dividend to Clear the Way for a ¥2,250-a-Share Buyout
Read moreJPMC's board scrapped this year's dividend the same day it backed a take-private tender offer priced on the assumption shareholders would get no payout at all.
KYUDEN Holdings Plans 474 Million New Shares to Take Over Kyushu Electric Power
Read moreA company that does not yet legally exist plans to issue 474.2 million shares to become Kyushu Electric Power's parent, and its own filing calls the ¥503.7bn price tag on the deal unconfirmed.
Datasection Sues Wolfpack Research Over GPU Export-Control Claims
Read moreDatasection has sued short seller Wolfpack Research in a Pennsylvania federal court, seeking retraction of a report that accused its AI infrastructure GPU purchases of breaking U.S. export-control law; the company says its lawyers cleared the projects, and the damages claim remains unquantified.
Isuzu's Profit Jumps 23% as Faster Supplier Payments Squeeze Cash Flow
Read moreIsuzu's operating profit rose 30.7% to ¥74.8bn in the June quarter, but operating cash flow flipped to a ¥45.3bn outflow after the company sped up supplier payments by about ¥90bn and let Middle East shipping delays build roughly ¥35bn of extra inventory; full-year guidance is unchanged.