Japanese trading houses face billions of dollars in impairments due to the double whammy of an emerging market downturn and the ongoing commodities rout, after splashing billions of dollars on earlier acquisitions.
Known as "sogo shosha," the general trading houses supply everything from energy to metals to grains and textiles in resource-scarce Japan. The big five trading houses are Mitsubishi, Mitsui, Sumitomo, Itochu and Marubeni.
Although they trade in a wide range of products and were traditionally importers of goods into Japan, conglomerates such as Mitsubishi, Sumitomo and Mitsui have expanded their footprints overseas, which means they have taken bigger hits from the commodities crash.
"They are trading houses but have become a lot more (like commodity) houses," said Seijiro Takeshita, a professor at the University of Shizuoka's management and information school.
In January Sumitomo took a $650 million writedown at a nickel project in Madagascar, while Itochu last year sold for just $1 a 25 percent stake in U.S. oil and gas producer Samson Resources that it had paid $1 billion for in 2011.