Japan: An embarrassment of riches.
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Japan: An embarrassment of riches.

Profits from zaiteku rise by the month at Japanese companies--and so do the illfeelings and embarrassment generated by the earnings from such financial engineering.

Once captive to a web of obligations to banks and severely limited by a paucity of investment choices, Japanese manufacturers are enjoying unprecedented growth in income from use of funds. Some large corporations --Nippon Victor, Sanyo Electric and Sharp, for example--are drawing about half their recurring profits from fund revenue. Toyota Motor Corporation's profit from financial sources is bigger than the profits of some regional banks.

This does not mean, however, that Japanese manufacturers have plunged en masse into financial dealings as a staple of business. Most corporate policy is rigid, at least on the surface. Safety and liquidity are primary concerns. They claim that research and development and plant and equipment take priority over fund investment. Some companies, like Sony Corporation, are openly hostile to the riskier forms of Zaiketu.

At Matsushita Electric, Takeshi Manda, a senior manager in the finance department, said: "We absolutely don't speculate. Our first consideration is safety. If anything is left over from manufacturing needs, then we'll be doing what is best possible with it.'

What is considered as being "left over' is beginning to amount to a considerable pile. Seven Japanese manufacturers each registered more than 10 billion profit from fund revenue in the latter half of 1985, a Wako Research Institute report shows.

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