Japan's large corporations are expected to post double-digit profit growth for fiscal 2004, according to updated forecasts issued Thursday by two private research institutes.

But growth is likely to decelerate in fiscal 2005, with the high-tech and telecom sectors expected to perform weakly from the second half of the current fiscal year, they said.

Nomura Securities Co.'s Financial and Economic Research Center expects combined pretax profits at 343 firms to grow 21.9 percent year-on-year in the current fiscal year.

In September, it forecast 18.5 percent growth.

This strong growth is being led by the chemical industry, which has successfully transferred rising oil costs to product prices, Nomura said. Steelmakers and automakers are also enjoying robust demand, it added.

Likewise, Daiwa Institute of Research Ltd. expects the combined pretax profit of 300 companies to grow 24.4 percent year-on-year for the current fiscal year. In September, it forecast growth of 22.2 percent.

Nomura and Daiwa have been tracking a group of large companies covering all sectors, excluding the financial industry, for profit and sales growth.

Both expect weak profit growth for fiscal 2005, stating that big firms are likely to lose steam during the second half of fiscal 2004 and the first half of fiscal 2005.

The high-tech sector is expected to experience a sharp slowdown, hit by inventory adjustments and fierce downward price pressures, which slash profit margins, they said.

The telecommunications industry is also likely to pull down total growth, as both cell phone and fixed-line carriers will suffer profit falls amid intense competition.