Returns on equity, a measure of how much profit a company makes for its size, are also very low because Japanese companies tend to have low profit margins. Some companies are now trying to improve their relations with shareholders as they raise more funds from financial markets and less from Japan's troubled banks. To underline the new relationship with shareholders, Japan's most powerful companies have started buying back their shares. But the bulk of the companies have yet to make a necessary change. Unfortunately, Japan's public companies aren't much help.
Annual reports are woefully opaque by U.S. standards.
Companies generally don't break down sales by division or business line, and can be sparse in describing how they depreciate assets. They traditionally hold securities at the value at which they were bought, sometimes years ago, not the value at which they can be sold. Financial companies have kept bad loans on the books, but out of investors' sight, for years. And analysts and fund managers here complain that Japanese companies rarely answer questions about financial details. Japanese brokerage companies aren't always trustworthy, either.