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Shuli Ren

Cash Is No Longer a King Trading Strategy in Japan

Investors are chasing stocks in companies with high sales growth rather than dividends.

Cash has lost its luster for investors in Japanese stocks.

Cash has lost its luster for investors in Japanese stocks.

Photographer: Tomohiro Ohsumi/Bloomberg

Cash is king, unless you are in Japan. One successful trading strategy there has recently lost its luster, thanks to the Bank of Japan’s never-ending obsession with negative interest rates. 

When a global recession looms, investors tend to hug stocks that pay handsome dividends. Cash rewards also have appeal at corporate headquarters. Since the collapse of Lehman Brothers, the S&P 500 companies have shelled out as much as 35% of their spending to buy back shares – even at the expense of capital investments – propelling the U.S. market to a record bull run.