Signs are emerging that Japan’s much-touted corporate reforms are reaching the industrial heartland of Nagoya, after sweeping through Tokyo and helping lift share prices.
Nagoya, a bustling city some 340 kilometers west of Tokyo, and the area around it are home to manufacturing giants including Toyota, the world’s biggest automaker, and Toyota group auto parts maker Denso. Aichi Prefecture, where Nagoya is located, is the country’s biggest manufacturing hub and home to the largest producer of cars, electronic machines and ceramics, among others.
Companies in this region are reputed to be even more conservative in their balance sheet management than the rest of Japan, and cash holdings data bear this out: two-thirds of companies included in the Maxis S&P Tokai ETF, which invests in 50 companies in the region, are net cash positive, compared with 39% firms excluding banks in the Topix 100, according to Bloomberg-compiled data.
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