They are cutting costs and overheads. Profits are up and look set to continue to rise. But the problem is that the vast majority of Japanese people are getting the stick, not the carrot. Thus, the strong recovery in firms' profits can be almost entirely attributed to wage cuts and pulling cost cuts out of smaller firms, which then have to cut wages even more. But that is at the margin.
Profits are marginal profits less overheads.
So if fixed costs are cut, profits can rise faster. Therefore, given the weakness in marginal profitability, the sharp rise in corporate profits has only come at the expense of the workforce. The point is that the listed firms are unlikely to be able to sustain the pace of profit growth. They can only cut costs so much, and with oil prices and other input costs rising, they may not be able to do that for much longer. If shipments were to stagnate, given the deflationary pressure in most sectors, sales could falter and profits could even begin to erode.