Japanese businesses are experiencing a resurgence of excitement, not seen since the 1980s. Over the past decade, profit margins for Japanese companies have doubled, resulting in owners receiving twice as much in dividends and share buy-backs compared to ten years ago. This recent success can be attributed to Japan Inc’s evolution over the past 35 years. Faced with economic challenges at home due to the stockmarket crash and an aging population, Japanese industrial giants have shifted their focus towards seeking growth opportunities abroad.
In 1996, foreign subsidiaries of Japanese manufacturers accounted for just 7% of total sales revenue. However, last year, this figure reached a record high of 29%, showcasing the significant expansion of Japanese companies’ presence in global markets. The implementation of shareholder-friendly changes in corporate governance in Japan has led to an influx of foreign investors returning to the country. As a result, the Nikkei 225 index, which tracks the value of Japan’s largest listed firms, has seen a 25% increase over the past year and surpassed its 1989 record.
The profit margins for Japanese companies have doubled over the past decade due to their shift towards seeking growth opportunities abroad. This has led to an influx of foreign investors returning to Japan and resulted in an increase in dividends and share buy-backs for owners. The implementation of shareholder-friendly changes in corporate governance has also contributed significantly to this success by attracting foreign investment back into Japan’s economy.
Overall, Japan Inc’s evolution over the past 35 years has led to significant expansion and increased profitability for its companies. With continued growth opportunities abroad and favorable changes in corporate governance domestically, it looks like this resurgence will continue well into the future.
In summary, recent years have seen a surge in excitement among Japanese businesses as their profit margins have doubled over the past decade. This is due largely to their focus on seeking growth opportunities abroad and implementing shareholder-friendly changes in corporate governance that attracted foreign investment back into Japan’s economy. As a result, we have seen an influx of foreign investors returning to Japan and a surge in dividends and share buy-backs for owners.
The Nikkei 225 index has also experienced significant growth over the past year due to these factors with a rise above its previous record set in 1989. It is clear that this resurgence will continue well into the future as long as there are continued growth opportunities abroad and favorable changes domestically within corporate governance practices.
