Corporate Japan's ROE projected to hit lowest level in 5 years
Country continues to lag behind US, European peers in capital efficiency
Komatsu expects its ROE to fall from last year as profitability takes a hit from the strong yen and U.S. tariffs. (Photo by Kensho Motowaki)
KENSHO MOTOWAKI
TOKYO -- Return on equity at Japan-listed companies is projected to slide to the lowest level in five years as cash holdings mount, with accumulated profits outpacing growth investments and shareholder returns.
The overall return on equity (ROE) in the current fiscal year ending March 2026 is expected to fall 1.1 percentage points from a year earlier to 8.5%, according to Nikkei calculations. Companies with a projected ROE of 8% or more totaled about 510, down almost 40 from the prior year.
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