Since the establishment of the second Trump administration on July 7th, the number of domestic companies has been postponing the formulation of a “medium-term business plan,” which states the company’s business policy. Photo taken in Tokyo in February 2016 (Reuters/Toru Hanai, 2025)
[TokyoJuly7(Reuters)-SincethelaunchofthesecondTrumpadministrationthenumberofdomesticcompanieshasbeenpostponingtheformulationofa”medium-termbusinessplan”thatstatesthecompany’sbusinesspolicyThenumberoflistedcompaniesthatannouncedtheirmidtermplanbetweenAprilandJune2025wasdownabout30%comparedtothesameperiodlastyearInadditiontoadditionaltariffpoliciesthesituationintheMiddleEastsuchastheUSattackonIranhasnotbeenpredictedandthemanagersareclearlykeentocarefullyassessthefutureIfJapan-UStariffnegotiationscontinueforalongtimethereislikelytofurthernegativeimpactoncorporatestrategyplanning[TokyoJuly7(Reuters)-SincethelaunchofthesecondTrumpadministrationthenumberofdomesticcompanieshasbeenpostponingtheformulationofa”medium-termbusinessplan”thatstatesthecompany’sbusinesspolicyThenumberoflistedcompaniesthatannouncedtheirmidtermplanbetweenAprilandJune2025wasdownabout30%comparedtothesameperiodlastyearInadditiontoadditionaltariffpoliciesthesituationintheMiddleEastsuchastheUSattackonIranhasnotbeenpredictedandthemanagersareclearlykeentocarefullyassessthefutureIfJapan-UStariffnegotiationscontinueforalongtimethereislikelytofurthernegativeimpactoncorporatestrategyplanning
When Reuters asked Daiwa Research Institute to tally the results, the number of companies that announced their new medium-term plan between April and June was 286, down 124 from the same period last year. Companies for the March term often announce their midterm plan at the end of the fiscal year ending in May, but this year, the Trump administration imposes a flat rate of 10% tariffs in each country in April. The environment surrounding companies has changed dramatically, with additional 25% tariffs (steel later being 50%) imposed on automobiles and steel.
Daiwa Research Institute’s Chief Consultant Igarashi Yoichi points out, “With the outcome of tariff negotiations between Japan and the US, it is difficult to predict revenue, there are a number of companies canceling or postponing plans.”
Although the medium-sized plan is not mandatory, like securities reports or financial statements, in recent years the number of companies formulating it has been on the rise. The background to this is that the Tokyo Stock Exchange has requested listed companies to “management that is conscious of capital costs and stock prices.”
Using the medium-term plan, there has been a growing movement to communicate initiatives aimed at improving capital efficiency. “Not only large companies, but also medium-sized companies have begun to formulate them,” said Igarashi, and in 2024 it hit a record high of 693 companies, an increase of about 40% from the previous year, marking a new record high of 693 companies, and was expected to see further increases this year.
Foreign companies, including the US, tend to place a strong emphasis on short-term performance targets, and it is not mainstream to quantitatively and comprehensively compile management plans in the next three to five years. The reason why medium-sized plan has become established in Japan is also related to its compatibility with long-term corporate practices, such as seniority and lifetime employment.
The first in Japan is said to be Matsushita Electric Industrial (now Panasonic Holdings), and founder Matsushita Konosuke announced the “Five-Year Plan” at a management policy briefing in 1956. The company has set a goal of increasing its annual sales, which was 22 billion yen, to 80 billion yen in 2010.
Recently, the rise of silly shareholders (activists) who are loudly requesting increased dividends and share buybacks has led to companies being required to provide more detailed explanations about their growth strategies. Furthermore, as the risk of “no consent acquisitions” increases with the Ministry of Economy, Trade and Industry’s guidelines, the importance of the medium-season plan, which is a “dialogue tool” with capital markets, is increasing in order to maintain a high market capitalization as a defense tool. Many believe that once Japan-US tariff negotiations close, the movement to publish the medium-sized plan will gain momentum again.
Oya Naohiro, partner of PwC Advisory, who supports the formulation of the plan, said, “The content of the medium-sized plan has become more sophisticated, including including restructuring the business portfolio (to gain evaluations from investors), and in the future, we will be entering a stage where our ability to implement to achieve our goals will be questioned.”
(Edited by Ogawa Yusuke: Hashimoto Hiroshi)
Reporting by Yusuke Ogawa
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