April 19, 2018

Japan entering a new era of capital efficiency


For years, ROE among Japanese companies languished in low single digits. No more. The average ROE rose to 9.1% in the fiscal year 2017, clearing the 8% "minimum" target set by the influential government-commissioned Ito Report published in 2014. The Japanese companies managed to raise their ROE not through financial leverage but through higher ROA and fatter profit margin. We find it remarkable that non-manufacturers, long considered an inefficient part of Japan Inc. are enjoying an unprecedented level of ROA in recent years. In our view, the rise in ROE is combined results of the cyclical upturn in the economy and the improvements in the corporate governance in Japan.

To read a full report, please become a Standard / Corporate subscriber.

Start a subscription with 30-days Free Trial

If you are already a JMA subscriber please

Recently Published

What is "Industrial production"�? Industrial production is one of the ke...

View Page

The Ministry of Health, Labour and Welfare gathers information on job openings, ...

View Page

Consumer confidence index, published by Cabinet Office as a part of "Consumer co...

View Page

The Trade Statistics of Japan is made and published by the Ministry of Finance a...

View Page