Corporate governance reform in Japan may face setbacks, raising concerns in the market

```htmlAccording to Golden Ten Data on May 15, Japan's Financial Services Agency is preparing to revise the Corporate Governance Code for the first time in five years. This code has long served as an important guiding framework for promoting increased corporate value at listed companies. The Financial Services Agency has already made the draft revisions available for public comment, with the comment period closing this Friday. Meanwhile, Japan's Ministry of Justice is also seeking feedback on proposed amendments to the Companies Act, with the deadline set for next week. The draft revision released in April has drawn criticism from some market participants, who argue that it places excessive focus on corporate interests. Haruna Usui, Head of ESG Strategy for Alliance Bernstein Japan, stated, "We are seeing a reversal in corporate governance reform." She noted that resistance within Japanese corporations is rising, partly because companies face growing pressure from activist investors to deliver higher returns on capital, "which could have a negative impact on the stock market." Both global and domestic investors are paying close attention to the revision of the Corporate Governance Code. Previously, there had been a widespread expectation that companies would be required to demonstrate effective use of cash holdings. However, recent discussions suggest that cash management will not become a mandatory requirement.```