① Of the Japanese stock companies that have published financial reports as of May 10, 53% have announced plans to increase their dividends this fiscal year; ② In addition to dividends, the number of shares announced to be bought back has also reached a record high. ③ According to Goldman Sachs Group data, a Japanese company announced a 1.2 trillion yen (7.7 billion US dollars) share repurchase plan in April, which is the highest record for the first month of the previous fiscal year.
Financial Services Association, May 15 (Editor: Xiaoxiang) Although the rise in Japanese stocks has been blocked recently after breaking the 34-year high record in March of this year, many industry insiders said that Japanese companies are increasing dividends and stock repurchases at a record pace, which is likely to provide further support for this market in a region on the verge of adjustment.
Fumio Matsumoto, chief strategist at Okasan Securities (Okasan Securities), said that 53% of Japanese stock companies that have announced financial reports as of May 10 have announced plans to increase their dividends this fiscal year.
While the Tokyo Stock Exchange forced companies to improve capital efficiency and valuations, a large number of Japanese companies increased their dividends to shareholders. These positive measures also contributed strongly to the rise in Japanese stocks.
Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management, said that Japanese companies are taking action. Investors welcomed this.
In addition to dividends, the number of share buybacks announced also hit a record high. According to Goldman Sachs Group data, Japanese companies announced a 1.2 trillion yen (7.7 billion US dollars) share repurchase plan in April, which is the highest record for the first month of the previous fiscal year.
Among these companies is ITOCHU Corporation, which Buffett bought. After the general trading company said it would buy back about 150 billion yen of shares, its stock price soared. Furthermore, real estate developer Mitsui Fudosan and industrial electronics manufacturer Hitachi both experienced significant increases in stock prices after announcing stock buybacks.
Bruce Kirk, chief Japanese stock strategist at Goldman Sachs, wrote, “This indicates that the current fiscal year ending March 2025 will be a new high year for (Japanese stock) repurchase announcements.”
These dividends and repurchase plans to give back to shareholders partially offset the disappointment caused by some Japanese companies' cautious profit guidelines. According to data from SMBC Nikko Securities, the Eastern Stock Index Corporation expects a net revenue increase of only 0.8% for this fiscal year.
Japanese companies traditionally give relatively cautious guidance at the beginning of the fiscal year, so many investors expect to improve these performance guidelines during the year.
Neuberger Berman East Asia senior vice president Kei Okamura said that investors currently prefer dividend increases combined with long-term capital plans (such as increasing the overall dividend rate). This can provide a clearer long-term perspective and has positive implications for stock prices.
He pointed out, “For analysts and investors, it's difficult for stock buybacks to be included in their (valuation) model, but if they change their dividend policy, this can be incorporated into your model, so we have better visibility.”
According to the schedule, the Japanese stock earnings season will enter the final sprint stage this week, and most companies that have not yet disclosed their results will release financial reports on Wednesday.