Japan Inc's 233t yen cash hoard fuels overseas buying spree

Tokyo

JAPANESE companies are on an overseas buying spree. Canon Inc, Japan Post Holdings Co and Itochu Corp have led US$28 billion of purchases abroad so far this year, the fastest start on record for Japanese acquirers, according to data compiled by Bloomberg going back to at least 2006.

They're paying up, too, with takeover premiums that are about double the global average, the data show. And the trend is set to continue.

After years of building up cash to a record 233 trillion yen (S$2.7 trillion) as of the end of September, Japanese companies are looking to convert those stockpiles into future growth by investing overseas where the outlook is brighter.

While the yen's 14 per cent drop against the dollar in the past year has made foreign acquisitions more expensive, economists project the Japanese currency will weaken further amid Prime Minister Shinzo Abe's campaign to fight deflation. That give…