Nippon Steel Leads a Wave of Japanese Earnings Upgrades This Morning

Mitsubishi Heavy Industries' business profit for the three months to June jumped 65% to ¥159.6bn from ¥96.7bn a year earlier, as revenue rose 15.5% to ¥1.19tn. Profit attributable to shareholders nearly doubled, up 97.4% to ¥134.7bn, helped by the business-profit gain plus foreign-exchange gains as the yen weakened further. The driver: Gas-turbine and nuclear work inside the energy segment did nearly all of the lifting. New orders climbed 25.7% to ¥2.02tn, pushing the order backlog to ¥14.1tn.

The catch: Management left its full-year profit and dividend targets unchanged, raising only its order forecast, to ¥7.0tn.

Kubota's first-half profit beat its own forecast by 47%, and the company used the surprise to raise guidance rather than bank it quietly. A weaker yen and refunded US tariffs pushed the farm-equipment maker to lift full-year operating-profit guidance by ¥100bn to ¥400bn, a third higher than its previous target. Also announced: A ¥40bn share buyback, unveiled the same day as the earnings beat.

Why it matters: Tariff refunds turning into profit upside is a reminder that trade-policy swings cut both ways for exporters with US manufacturing exposure.

Ibiden now expects ¥127.0bn in operating profit for the year to March 2027, up from its May forecast of ¥90.0bn, as orders for AI-server chip substrates outrun its own planning; a second 2-for-1 stock split takes effect in October, doubling the share count.

DMG Mori's orders received rose 34.8% in the first half of 2026, to ¥335.2bn, with the pace accelerating each quarter: orders grew 28.8% in the first three months of the year and 40.5% in the second, on aerospace, defense and semiconductor-equipment demand.

What changed: On August 4 the machine-tool maker raised the full-year earnings guidance it had issued on May 1, lifting its operating-profit forecast for the year to December 2026 by 7.1% to ¥30.0bn and its revenue forecast by 2.7% to ¥580.0bn. Net profit attributable to owners of the parent was raised 3.3% to ¥15.5bn.

Why it matters: Machine-tool orders are a classic lead indicator for industrial capex, and DMG Mori's acceleration each quarter points to compounding demand from aerospace, defense and chipmaking customers rather than a one-off order surge.

Data-centre chiller sales and a semiconductor-chemical rebound lifted Daikin's quarterly operating profit 7.6%, even as US residential air-conditioner demand stayed limited and China's property slump kept HVAC demand thin; full-year guidance and the dividend forecast are unchanged.

Furukawa Electric has decided to spend roughly ¥100bn on new production equipment, land and buildings for optical fiber and its rollable ribbon cable, aiming to roughly double rollable ribbon-cable manufacturing capacity from current levels. The investment spans plants in the US, Brazil, Japan and India. The backing: Furukawa says it already holds customer purchase commitments, including long-term ones, for the added capacity.

The catch: The company itself says the investment's impact on next year's results is minor; the payoff from hyperscale data-centre fiber demand is a multi-year bet, not a near-term earnings driver.

Sumitomo Chemical told the Tokyo Stock Exchange on August 4 that its listed subsidiary, Sumitomo Pharma, had put out a formal response to a report about the drugmaker and its group, published a day earlier by Gotham City Research LLC. The parent's disclosure pointed investors to the subsidiary's own statement, where the substance sits.

Bottom line: Sumitomo Pharma says its auditor's unqualified opinion covers the accounts the report questions, and it has found no misstatements or accounting improprieties that would justify restating them.

Japan's Immigration Services Agency opened a month-long public comment period on August 4 for a draft ordinance that would add a five-year period of stay to the Specified Skilled Worker No. 2 visa, alongside the existing three-year, two-year, one-year and six-month terms. Comments are due by September 2, 2026.

Why it matters: The five-year option would align the visa's maximum stay with standard technical work visas, satisfying a prerequisite these workers must clear before applying for permanent residency.