More than 40 percent of Japanese companies surveyed have no plans to spend or invest funds generated by an expected cut in the corporate tax rate, a reflection of the deep-seated risk-aversion in corporate Japan and a challenge to the success of Abenomics.
The result of the Reuters Corporate Survey of 400 companies taken in late September and early October stands in contrast to other recent indicators of a thawing in corporate risk-aversion on signs of continued recovery in Japan's economy.
In the monthly Reuters survey, 30 percent of companies said they would bank any savings from a lower corporate tax rate and build up internal reserves, which now total more than $2 trillion (1.23 trillion pounds) for Japan's corporations taken as a whole.
Another 12 percent of companies responding said they would use any cash generated by a corporate tax cut pledged by Prime Minister Shinzo Abe to offset the expected higher costs from a sales tax increase set to take effect in April. Source: Reuters
