(Bloomberg) -- Japanese companies kept adding to their mountain of surplus cash in the first quarter, providing them with a buffer to cope with the virus pandemic about twice the size of Prime Minister Shinzo Abe's combined stimulus measures.
Corporate retained earnings rose to 484 trillion yen ($4.5 trillion), roughly 89% of the nation's gross domestic product in the three months to the end of March, according to finance ministry data published Monday.
Japan Inc. Unexpectedly Raised Investment at Start of Year
The extent to which firms tap into this cash hoard will likely be in the spotlight again as the current crisis unfolds, especially for companies that lay off workers.
Policy makers have been doubling down on their support for the economy. Since Abe called a national emergency in early April, his government has put together record stimulus packages worth 234 trillion yen or about 43% of GDP. The Bank of Japan's special measures total 75 trillion yen.
With the coronavirus threatening jobs and businesses, Economy Minister Yasutoshi Nishimura in March urged companies to spend their cash savings to cope with the pandemic.
Japanese firms have taken a more cautious stance on spending their income since the global financial crisis with many of them looking to shore up their finances in case of future economic shocks. This conservative stance has drawn criticism from policy makers, namely Finance Minister Taro Aso, as not being aggressive enough to boost growth through higher wages and investment.
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