Nomura Holdings, Japan's largest brokerage and investment bank, announced its latest quarterly earnings on Tuesday, revealing an unexpected 6% decline in net profit for the fiscal second quarter ending September. The company posted a net profit of ¥92.1 billion ($610.82 million), compared to approximately ¥98.4 billion in the same period last year.
Despite the profit dip, analysts remain optimistic about Nomura's prospects, citing Japan's newly appointed Prime Minister Sanae Takaichi's plans for an economic stimulus package exceeding last year's ¥13.9 trillion scale. This is seen as a major catalyst for Japanese equities, potentially ushering in a new phase of earnings growth and valuation expansion for Nomura.
Buoyed by record-high trading volumes in Japan and global equity markets, investors are increasingly bullish on Nomura's profit trajectory, driving its American Depositary Receipts (NMR.US) to a strong 30% year-to-date gain—outperforming the S&P 500.
The earnings report highlighted robust performance in Nomura's wholesale division, where revenue surged 43% year-on-year in the first half, lifting overall profits. This was fueled by record equity trading revenue, aligning with a global rebound in stock market activity and IPO financing—a trend that accelerated after former U.S. President Donald Trump's April announcement of de-escalated tariff policies triggered a bull market. Japan's Nikkei 225, up 25% this year, has led developed markets, breaching the 50,000-point milestone.
However, while Nomura's assets under management hit a record ¥101.2 trillion, pretax profit in its investment management division fell 4%, contributing to the overall net profit decline. Some high-net-worth investors adopted a wait-and-see approach during the quarter, leading to lower sales in wealth management compared to Q1.
The results underscored a strong recovery in Nomura's wholesale business, historically vulnerable to market volatility but now delivering sustained profits amid the global equity rally. The division comprises: 1) **Global Markets**: Providing institutional clients with fixed-income and equity market-making, sales, and trading across currencies, rates, credit, and structured products. 2) **Investment Banking**: Offering M&A advisory, equity/debt capital markets, and risk solutions to corporate, financial, and public-sector clients.
With the post-tariff "investor pause" fading, Nomura's advisory fees rebounded as deal activity revived. The firm retained its top ranking in Japan's 2025 M&A league tables, advising on major deals like Blackstone's $3.5 billion privatization of TechnoPro Holdings.
Prime Minister Takaichi's pro-growth policies—combining fiscal stimulus, industrial investment, and channeling savings into investments—are viewed as highly favorable for Japan's equity markets and financial giants like Nomura. As Japan's "super bull market" continues, brokerage and investment banking activities (e.g., trading, underwriting, M&A) are expected to drive further earnings growth.
Takaichi, a 64-year-old conservative nationalist and ally of the late Shinzo Abe, has sparked market bets on a revival of "Abenomics"—loose fiscal policy and cautious monetary tightening. The so-called "Takaichi Trade" reflects expectations of reflation: long Japanese stocks, short the yen, and avoiding long-duration assets.