A rise in stock prices and the appreciation of foreign currencies will increase the net asset values of firms – mainly exporting firms – that hold other firms’ equities and foreign currencies. This improvement in balance sheets will contribute to an increase in business fixed investment (Charts 8 and 9).
According to estimates by Nomura Securities, the unrealized gains stemming from equity holdings of 1,830 listed firms increased by 32 percent, adding 3.7 trillion yen, from end-March to end-September 2013. Moreover, the improvement in business sentiment on the back of an increase in corporate profits is another factor in increasing business fixed investment.