Companies in Japan have long been criticized for hoarding too much cash. Now the habit is being touted as a reason to buy their stocks as the coronavirus pandemic dims the outlook for dividend returns elsewhere.
Japan has "improving dividend appeal,” with its companies less prone to payout cuts than those in other countries, given their net cash positions and improving governance, Jefferies analysts wrote in a report.
"Japan is better placed versus its peers and is unlikely to see global financial crisis-era cuts,” strategist Shrikant Kale wrote in the report. "Amid deflationary concerns, the race to the bottom in global bond yields bodes well for dividend strategies.”