Japanese companies should not cut dividends

The rapid increase in dividends paid by Japanese companies, at a 21% annualised growth rate since 2003, has been a great achievement. Although this strong growth still leaves the payout ratio at an unacceptably low level, Nikko Asset Management expects a steady increase in dividends over the next few years to arrive at a more appropriate payout level of 30%.Japanese companies should not cut their dividends even if earnings decline (unless the payout ratio exceeds 100%), as such would …