Japanese stocks flat but increased disbursment of cash may benefit investors

Markets rose on Monday.

The STOXX Europe 600 rose 0.2 percent while the Shanghai Composite rose 1.2 percent.

The Nikkei 225 was flat though after Japan reported a bigger-than-expected trade deficit in January.

However, Bloomberg reported that a quiet revolution may be underway in the Japanese stock market.

Japan’s companies have for years sat on record piles of cash... The issue has been deploying those funds for shareholder benefit.

A key part of Abenomics has been sharpening the focus on return on equity, and now --through a mix of carrots and sticks -- some investors see change on the horizon...

“I have been in this industry 25 years but I have never seen this kind of approach before,” Yasunori Iwanaga, the Tokyo-based chief investment officer at the Japan unit of Amundi, which manages more than $1 trillion globally, said in an interview this month. “Reactions we have seen over the last few years are increasing dividend payouts or buybacks. This trend should continue over time.”