Japan Inc. Revives its Mojo: A 35-Year Evolution and a 25% Increase in Nikkei 225 Index

Japanese businesses have seen a resurgence of excitement in recent years, not seen since the 1980s. The profit margins for Japanese companies have doubled over the past decade, resulting in owners receiving twice as much in dividends and share buy-backs compared to ten years ago. This 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.

Japanese businesses have experienced a resurgence of excitement not seen since the 1980s. Profit margins for Japanese companies have doubled over the past decade, resulting in owners receiving twice as much in dividends and share buy-backs compared to ten years ago. 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 has seen a significant increase and surpassed its record from almost three decades ago. This recent success can be attributed to Japan Inc’s evolution over the past 35 years, shifting their focus towards growth opportunities abroad and expanding their presence in global markets.