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Japanese minister calls companies to investment more, increase wages

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Staff Writer | September 5, 2016
Finance Minister Taro Aso has urged Japanese companies to raise investment and wages as their retained earnings continue to increase.
Taro Aso
Asia   Retained earnings grew $220 billion
At a news conference, Aso complained about companies’ use of money, saying the proportion of funds spent on business investment should be raised further. Capital spending growth has been sluggish despite the increasing retained earnings.

According to a Finance Ministry report released Thursday, retained earnings grew ¥23 trillion ($220 billion) over the fiscal year through the end of March to ¥377.86 trillion ($3.6 trillion), hitting a record high for the fourth consecutive year.

Capital spending gained 7.1 percent from the previous year. But capital expenditures fell for the third consecutive quarter in the second quarter of the year.

Retained earnings are accumulated profits after payments of taxes, dividends, executive pay and other items. The increase in retained earnings means companies are holding back from investment and paying higher wages.

Aso said that the proportion of corporate spending on factories and equipment and on salaries has “certainly expanded.”