Already a subscriber?Japanese companies are doing something strange: they’re focusing on profitability measures. And that might just be the key to Nippon’s decade-long problem of dwindling productivity.
But despite these companies producing billions in annual sales across their hundreds of business lines, share prices had slumped and then stayed flat.because, in part, the average return on equity in Japan – a measure of how hard investor capital was working – was about 8 per cent. Mid-tier companies were worse, bumbling along with a return on equity of about 3 per cent to 4 per cent.
In a speech to the Japan Institute, he noted that ageing not only affected the societal speed of embracing new technology but also reinforced existing policies through voter preference at elections. The relationship between companies and the Japanese government has always been close – too close, as activist shareholders such as Elliot Management and Oasis Fund Management now argue.
All eyes turned to the big companies, which began grabbing the low-hanging fruit first. Mitsubishi said it would buy back 10 per cent of its shares. Toyota spent 100 billion yen buying back its shares. Mitsui Chemicals and insurance group T&D Holdings said they would raise annual dividends.