Greece would probably love to be in Japan’s shoes. Or not.
Despite repeated calls by Prime Minister Shinzo Abe for Japanese firms to spend and invest more to bolster the economy, companies remained steadfast on their resolve to sit on a pile of cash, threatening the growth outlook for the coming months.
According to Bloomberg, cash and deposits of Japanese firms went up 3.6% to 241 trillion yen ($1.96 billion) in March from the same month last year. This is the highest on record and the 26th straight quarter of increases.
Despite a healthy first quarter GDP, which rose at a revised 3.9% from a year ago and up from an initial 2.4% reading, Asia’s second-biggest economy can certainly use a boost from Japanese firms as the latest data on industrial output is not that promising.
Government statistics released Monday showed the country’s industrial production fell 2.2% last month, steeper than the 0.8% expected drop in a Reuters poll. Some economists are worried this could lead to a contraction in GDP growth in the second quarter of the year, according to CNBC.
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