Press Conference by SUZUKI Shunichi, Minister of Finance and Minister of State for Financial Services

(Excerpt)

(Friday, April 7, 2023, 8:46 am to 8:53 am)
 

Q.

One year has passed since the Tokyo Stock Exchange (TSE) reorganized its market structure. In the Doubling Asset-based Income Plan, I think the main point is how to make an environment feasible for growth investing, but there seem to be many issues, such as companies with price-to-book (P/B) ratios below 1. I would like to ask the Minister’s opinion on what the Financial Services Agency (FSA) considers is lacking and what measures can be taken, among other issues.

A.

With regard to companies with P/B ratios below 1, the percentage in Japan is 43 percent of the top 500 companies. I am aware that the percentage is high in Japan, compared with 5 percent of the top 500 companies in the United States and 24 percent of the top 600 companies in Europe.
Basically, enhancing corporate value of listed companies is a very important factor in achieving sustainable growth in Japanese economy. I think we should continually work on reforms that support the enhancement.
In view of this, the TSE, even after the reorganization of the market segments last April, has taken reinforcement steps such as clarifying the deadline for application of provisional measures against listed companies that do not meet the listing criteria for the Prime Market, etc., as well as demanding listed companies to develop and publish profitability improvement plans, paying more attention to capital costs and stock prices. I hope these measures will promote listed companies’ proactive mindset.
From the standpoint of the FSA, we are actively working on corporate governance reform to enhance medium- to long-term corporate value of listed companies.
Since last autumn, we have been hearing opinions of overseas investors from the perspective of accelerating the reform and further strengthening Japan’s corporate governance. As early as this month, we plan to draw up an action program that will promote listed companies’ efforts including self-sustained change of mind.