JAPANESE Prime Minister Shinzo Abe’s government Friday urged Japanese firms to help revive the flagging economy by using their hefty cash piles to boost capital expenditures.

    The request was made during the first round of talks between cabinet ministers and business leaders on expanding business investments, in a show of government pressure on companies to lift investment needed to generate a virtuous growth cycle.

    The move follows Abe’s intervention in labor-management talks to press firms to raise wages, at a time his “Abenomics” recipe of aggressive monetary stimulus, spending and growth strategies is seen losing momentum.

    “Corporate profits have risen to a record high but investment growth has not been enough,” Abe told the meeting.

    “Now is the time for companies to aggressively invest in facilities, technology and talent. The industry circles today showed a positive stance to expand investment.”

    Sadayuki Sakakibara, chairman of Japan’s biggest business lobby Keidanren, demanded the government lower the effective corporate tax rate — among the developed world’s highest — to below 30 percent as soon as possible to spark business investment.

    The government cut the corporate tax rate to 32.11 percent in the current fiscal year from last year’s 34.62 percent, and plans to reduce it to 31.33 percent next fiscal year.

    After the session, Economics Minister Akira Amari said it was wrong to think Japanese demand would not grow due to the country’s dwindling population.

    “It’s clear that domestic capital spending is weak, while companies are hoarding cash and savings,” he told reporters. “I want to push companies’ back to fill this gap.”(SD-Agencies)