One of the key takeaways from our trip was hearing that there is continued pressure from Japanese institutional investors and the Government Pension Investment Fund (GPIF) for companies to increase their pay-out ratio. It is still (on average) lingering at the 30% level (excluding buy backs). However, the gross pay-out ratio level (including buy backs) is high by Japanese standards and this includes a certain amount of cyclicality, with markets and earnings being high. If we see a setback in global growth and heightened volatility in markets, this could slip in the short term although investors in Japan believe that the trend is entrenched. With so many companies in Japan with large amounts of cash on their balance sheets, the ability to return more cash to shareholders is certainly there and the will of companies is slowly improving. We should remember that this is Japan however, and the conservative culture is deeply entrenched as is the lack of will to change too dramatically lest they make a mistake!