Japanese Earnings Momentum Continues To Grow

Japanese earnings momentum grew in Q2, as positive surprises outpaced by negative surprises by 62 percent, and there appears to be room for even more growth in Q3 according to Citi’s Japan Equity Strategist Kenji Abe.

The positive surprise ratio for Q2 was 62 percent, up from 55.6 percent in the first quarter of the year, and the percentage of companies that had both falling revenues and earnings fell from 25.5 percent to 18.3 percent. The number of companies that reported falling revenues and rising earnings fell to 11.2 percent in Q2. Usually companies in this group are focusing on greater efficiency and other cost cutting measures. Assuming the Japanese recovery continues these companies will be well...