In a cash crisis, one of the straightest lines a global investor can draw tracks the expanding cash piles of corporate Japan at the end of each fiscal year. For four decades, this line of retained earnings has advanced relentlessly to its record-breaking level at about 130 per cent of gross domestic product at the end of 2019.
No corporate base anywhere in the world has saved this assiduously for a rainy day — or been criticised so consistently by foreign shareholders for doing so. No one should be as well-placed — and self-righteous — now that the rainy day has arrived.
Cash, says everyone in times like these, is king. And yet there is apparently no reward at the point of coronation. Japan’s companies have been hit just as hard as everyone else’s by the coronavirus outbreak, with the Topix down 27 per cent this year. Corporate Japan’s cash-rich outrage may be silent but it is palpable.