Jinsei Finance reports that Japan’s financial regulators have urged listed companies to use cash reserves for long-term investment rather than repurchasing shares or raising dividends to return value to shareholders. Shibat, a senior official of Japan’s Financial Services Agency, said that in addition to cash, management should also consider growth-promoting assets such as cross-shareholdings and real estate. He noted that companies tend to favor returning to shareholders at every stage and that this mindset needs to be readjusted. Promoting the future expansion and allocation of corporate and household wealth is one of the core pillars of Prime Minister Sanae Suga’s drive to revitalize the economy, and she has long criticized companies for holding excessively high cash reserves.

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2026-05-24 23:48:27

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Golden Finance reports that on May 25, Japan’s financial regulators are urging domestic listed companies to allocate more of their cash reserves to long-term business investments rather than returning value to shareholders through share buybacks and increasing dividends. Tatsufumi Shibat, a senior official at Japan’s Financial Services Agency, said in an interview that, in addition to cash, executives should also consider using cross-shareholdings and real estate assets to drive growth. He noted that regardless of which stage Japanese companies are at on the growth curve, they tend to prioritize returning value to shareholders. “I don’t believe investors will make such demands of companies that are in a rapid-growth phase,” he said in the interview. Redirecting the large amounts of Japanese wealth held by corporations and households toward funding future expansion is one of the core pillars of Prime Minister Sanae Takaichi’s revitalization of the Japanese economy. She has long criticized the cash reserves on corporate balance sheets.

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Japanese regulators urge companies to use cash for growth rather than shareholder returns

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