Japan watchers are paying particular attention to this reporting season which they say will give important insights into how corporate profitability is holding up following the recent consumption tax hike.
"At the beginning of this fiscal year [April 2014], company guidance tended to be on the weak side because of concerns around consumption tax hike. But so far the macro environment hasn't been so bad, so earnings could be better than originally expected," Hiromichi Tamura, chief strategist at Nomura Securities told CNBC.
In April, Japan raised its consumption tax to 8 percent from 5 percent, the first increase in 17 years, as part of efforts to rein in mounting public debt. The move prompted concerns that the economy's fragile recovery could be derailed. However, its impact has so far been mixed, with corporate sentiment souring, but consumer demand holding up.
Japanese car sales, for example, climbed 0.4 percent to 452,555 units in June – the first gain in three months. Business confidence, meanwhile, dipped in the second quarter – the first fall since Prime Minister Shinzo Abe came to power in late-2012 and unleashed radical measures to kickstart the economy.
Nomura expects growth in recurring profit – which is before tax and extraordinary items – of around 10 percent on year for the April-June quarter.
Japan's earnings season gets into full swing this week, with Nissan Motor reporting on Monday, Nomura, Shinsei Bank, Japan Airlines and Honda Motor on Tuesday, All Nippon Airways (ANA), Nintendo, steelmaker JFE, telco KDDI and Mitsubishi Motors on Wednesday and Sony, Toshiba, Fujitsu, Panasonic, Mitsubishi UFJ and Mizuho on Thursday.