A few years ago things looked bleak for many of Japan's corporate heavyweights, with banks suffocating in bad debts, electronics giants seeing sales slump and steelmakers wallowing in losses.
Fast forward to today and many leading names in Japanese business are preparing to report a sharp improvement in their financial performance as a gradual recovery seen in recent years gathers momentum.
"This is the fourth year of profit growth so we are far beyond a recovery. We are at an economic expansion period," said Stefan Rheinwald, head of research at investment bank CLSA Asia-Pacific Markets in Tokyo.
"Japan is in very good shape. The expansion period should continue," he added.
Upbeat outlook
Investors are pinning their hopes on a slew of upbeat earnings results as the annual earnings season gets in full swing this week, with the Tokyo stock market riding a wave of interest among foreign investors.
The Nikkei-225 index of leading Japanese companies has soared by over 45 percent since the beginning of last August on hopes that after plenty of false dawns in the world's number two economy, this recovery is for real.
Many companies have already flagged rising profits in their outlooks for the fiscal year which ended last month, with a flurry of recent upgrades.
On top of the improvement in Japan's economy and rising consumer spending, many firms have also been through radical restructuring.
"They have made great improvement in their operating profitability. Their operating cost structure is in much better shape," Rheinwald said.
"What is still quite sub-optimal is the way the manage their balance sheets. There are too many companies that have been hoarding cash due to the difficult times," he added.
Recovering banks
Japan's banks are finally emerging from a long bad-debts crisis after the government injected trillions of yen in order to ease strains on their balance sheets and in the wake of several mega-mergers.
Leading the pack is Mitsubishi UFJ Financial Group (MUFG), the world's largest bank created after a merger last October that swallowed up UFJ, which was floundering in losses because of bad loans.
MUFG has forecast a net profit of ?1.17 trillion (US$9.95 billion) for the year just ended -- almost twice that of its closest domestic rival.
Consumer electronics makers have also seen a marked turnaround. In 2001 many were sliding deep into the red and slashing jobs.
While several are still in the midst of painful restructuring, such as iconic Sony, experts believe the tide has turned, helped by brisk demand for products such as hot-selling flat-panel televisions.
Past the bottom
"The industry as a whole has already bottomed out," said one Tokyo-based consumer electronics analyst.
"You still have companies with significant risk that are afloat because demand in the market for flat-panel TVs is rising," but overall things are improving, he said.
Even Sony no longer expects to end the year in the red, raising hopes of a turnaround at company that invented of the Walkman and is restructuring including 10,000 job cuts.
Most major automakers are also on a roll, led by Toyota, which expects to report another record year with net profit above last year's ?1.17 trillion as it steals market share from ailing US rivals.
Exceptions to the rule
However, not all companies are faring so well.
Electronics maker Sanyo, which is cutting 14,000 jobs, forecasts a full-year net loss of ?233 billion, while Japan Airlines expects to sink ?47 billion in the red due to high-oil prices and weak passenger numbers.
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