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Bloomberg

Japan Shift From Buybacks May Benefit Longer Term, Managers Say

Markets By and Momoka Yokoyama Save A reported recommendation from a Japanese government ministry that companies use spare cash for investment instead of buying back stock would benefit long-term investors, according to asset managers. That's the view of Taku Ito, chief equity fund manager at Nissay Asset Management Corp., who says buybacks are positive in the short term but neglect essential investments for the future. The reported guideline 'may seem negative in the short term, since stock prices have risen due to buybacks, but in the medium to long term, it's pointing in the right direction,' Ito said.