Japanese companies from NTT Docomo Inc. to Honda Motor Co. are putting the brakes on spending as they pile up cash, showing the challenge Prime Minister Shinzo Abe's new Cabinet faces in reviving the economy.
Capital expenditure growth by nonfinancial companies will slow on aggregate to 1.3 percent next fiscal year from an estimate of 7.9 percent this year, according to a Moody's Investors Service study of rated companies. Firms on the Topix share index boosted cash by 10 percent to ¥68.5 trillion ($650 billion) in the past year, Bloomberg-compiled data show.
"Companies are piling up cash because they remain cautious," Peggy Furusaka, a Tokyo-based credit analyst at Moody's, said in a telephone interview Friday. "The biggest spenders, the automakers and telecommunications companies, had already started spending from three years ago and they are leveling off as they move through their investment cycle."