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Reforms press Japanese firms to put cash to use

Wednesday, February 11, 2015


Pension fund and corporate governance reform in Japan.


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.


  • 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.

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