To read the full version of this content please select one of the options below:

Reforms press Japanese firms to put cash to use

Wednesday, February 11, 2015

Subject

Pension fund and corporate governance reform in Japan.

Significance

Corporate hoarding of cash and deposits rose to a record 233 trillion yen (2 trillion dollars) at the end of September 2014, the latest Bank of Japan data show. However, reform efforts are under way to promote risk-taking and increase returns from financial investment. They include changes to the portfolios of government pension funds, a new corporate governance code, a stewardship code for institutional investors and a new equity index to showcase the firms giving the best return on equity.

Impacts

  • Public pension fund portfolio changes could shift tens of billions of dollars into foreign equities and bonds.
  • The demands of an ageing population will add to pressure on pension funds to seek higher returns.
  • Peer pressure could be a powerful motivator if a critical mass of companies can be persuaded to change.
Expert Briefings Powered by Oxford Analytica
Stay up to date
Sign up to the Expert Daily Briefings email alert and receive up-to-the-minute analysis of global events as they happen.
*If your university does not have access to Expert Briefings, visit our information page to find out more.