Prime Minister Fumio Kishida’s suggestion of restricting share buybacks spooked Japan's markets Tuesday, but analysts are doubtful that such a policy will be implemented.
A limit on share buybacks at a time when companies are following the rules is "complete nonsense,” said Seiichi Suzuki, a market analyst at Tokai Tokyo Research Institute Co. If Kishida were to impose restrictions, it might be possible to do so for companies that have a high book value, he said, but even that would be difficult.
Chizuru Morishita of NLI Research Institute and Hiroshi Namioka of T&D Asset Management were similarly doubtful that Kishida’s words could lead to any aggressive restriction on buybacks. While a cap could be applied to the level of total shareholder returns, it’d be difficult to implement given the varying size of each company, Morishita said.