Two days after Prime Minister Shinzo Abe secured a pledge from Japan Inc. to do its best to boost wages to revive the world's third-biggest economy, data showed companies hoarding record amounts of cash.
Corporate holdings of cash and deposits rose 4.2 percent from a year earlier to ¥233 trillion at the end of September, increasing every quarter for the past six years, according to the Bank of Japan. At the same time, firms' assets in direct investment overseas rose to a record ¥73 trillion.
While Abe and BOJ Gov. Haruhiko Kuroda have urged business leaders to distribute more of the profits generated by the weak yen, companies are not buying into the plan. Declining capital expenditure helped drive a mid-year recession, households' real incomes are falling, and firms trimmed their inflation outlook and predict the yen's depreciation will not last.