Japan’s nominal GDP, commonly used to gauge a country’s real standard of living, has remained mostly unchanged since the 1990s following the collapse of Japan’s asset price bubble and the onset of deflation. But even given the difficult low-growth environment, companies have on the whole been able to exhibit a capacity to generate earnings, with firms listed on the TSE First Section (excluding financial institutions) recording their highest pretax profits in seven years in fiscal year 2014, while further profit growth is expected over the next two years (see graph on below left).