Japanese Trading Companies Brace for US Tariff Impact

Japanese trading giants Mitsui, Sumitomo, and Sojitz have issued cautious profit forecasts, citing concerns over U.S. tariffs and their potential to disrupt global supply chains. The Bank of Japan has cut its economic growth forecast, and company executives warn of risks such as a possible global recession, slowing U.S. and Chinese economies, and higher costs. Mitsui expects a 15% drop in net profit, while Sumitomo, despite projecting a record profit, has set aside buffers to offset tariff impacts. Sojitz sees modest profit growth but notes both direct and indirect effects from tariffs, particularly on North American auto sales. Amid these uncertainties, analysts are turning more optimistic on Japanese stocks and the yen, while remaining wary of U.S. equities, with investment sentiment weakening in the U.S. due to ongoing tariff uncertainties and cautious monetary policy. The shifting investment climate has also prompted Japanese investors to increasingly favor India over China and ASEAN, seeking to mitigate risk from global trade tensions.