Nomura likely to maintain earnings momentum after US-Japan trade deal

Nomura Holdings Inc.'s net profit jumped 52% year on year in the April to June quarter, and it expects sustained earnings momentum as the US-Japan trade deal will reduce economic uncertainty.

The wholesale business led net income in the quarter to ￥104.6 billion, compared with ￥68.9billion a year earlier, Japan’s biggest brokerage house and investment bank said in a statement on July 29.

"We got off to a good start amid the economic uncertainty," Hiroyuki Moriuchi, Nomura's chief of finance, said at a post-earnings online conference. "Now the economic uncertainty is easing, stocks are recovering, and customer sentiment is improving."

Japanese stocks rallied after the US reduced the tariff rate for Japan to 15% from 25% on July 22, to investor relief. Japan's Nikkei Stock Average has since climbed 2.1% to 40,627 points on July 29. It reached 42,065 on July 24, nearing its record high set in July 2024. The S&P 500 Index is also trading near all-time high levels.

Turmoil averted

The trade deal "avoids turmoil in the financial industry, supporting the securities and banking sectors," said Masahiro Ichikawa, a chief market strategist at Sumitomo Mitsui DS Asset Management. Stocks and bonds plunged in early April when the US threatened higher tariffs for its global trading partners.

Nomura's wholesale segment posted a 98% surge in pretax profit from a year earlier to ¥41.9 billion in the three months to June, driven by equities in Japan and the Americas despite the volatility caused by the economic uncertainty from the US tariff threat.

The Investment banking segment also gained momentum, generating ￥37.9 billion in revenue as it benefited from an increase in mergers and acquisitions. The wholesale segment accounted for nearly 40% of total pretax profits across all segments.

Other businesses, including wealth management, investment management segment, and banking, showed lackluster performance in the April-to-June quarter. Pretax profit from wealth management declined by 6% year on year to ￥38.8 billion amid uncertain global market conditions.

Investment management's pretax profit dropped 7% to ￥21.5 billion. Alternative investments seeking higher returns increased by around 25% from a year earlier to ￥2.658 trillion as of the end of June.

The banking operations, established in April 2025, reported a modest pretax profit of ￥3.6 billion in the April-June quarter with outstanding loans of ￥1.069 trillion.