Japan's 10-year government bond coupon topped 3% for the first time in about 30 years. So which companies could pay a dividend yield above that without cutting it in a bad year? Katana kept 33 companies that mention a progressive dividend in their dividend policy, yield at least 3.5%, trade at 12 times earnings or less and had no operating loss in 10 years, and AI read each one and supported 2.
Japan's Ministry of Finance set the coupon on 10-year government bonds issued in October at 3.1%, up from 2.7% for July–September and the first 3% level since August 1996, about 30 years ago. The Bank of Japan raised its policy rate from 1.00% to 1.25% in September, and most expect it to hold at its October 29–30 meeting to see how last month's hike plays out.
Worries about the economy remain. US payrolls rose by only 29,000 in September, far below the 90,000 expected, and unemployment rose to 4.2%. In its October World Economic Outlook, the IMF put global growth at 3.1% for 2026 and named escalating conflicts, a reassessment of expectations for AI and renewed trade tensions as downside risks.
On the Japanese side, more companies are promising not to cut their dividends. Shibusawa Logistics adopted a progressive dividend with a floor of ¥140 a year in May 2025, and Maezawa Kyuso Industries switched to a progressive dividend in August that year. Today, 369 companies mention a progressive dividend (累進) in the dividend policy of their annual report.
If government bonds pay 3%, a 3–4% dividend yield alone is a thin reason to own a stock. What stocks offer and bonds do not is a dividend that grows.
But dividends get cut when earnings fall. A cut in a recession pushes that year's yield below the bond's, and the share price tends to fall too. A promise not to cut the dividend means little if it cannot be kept when earnings drop.
So among cheap, high-yield stocks, we used Katana to find companies that promise not to cut their dividend (a progressive dividend) and earn in a way that can support that promise in a bad year.
“We want companies that commit in their dividend policy not to cut the dividend per share and to maintain or raise it (a progressive dividend), that earn most of their revenue from businesses whose demand is unlikely to fall sharply in a recession, and that look cheap with a high dividend yield.”
We kept companies whose annual reports mention a progressive dividend (累進) in the dividend policy and filtered them by dividend yield, P/E and the stability of operating profit over 10 years, turned this profile into two questions entered in English, and had the AI read each report, question by question.
Katana computes its metrics for every company.
AI reads each annual report and judges support and counterevidence.
The questions were entered in English and judged in order.
read the filings and supported 2.
Of 33 companies, 2 were supported, 6 need review and 25 had counterevidence. Shizuoka Gas, which was supported, comes first, followed by the 2 we added from those needing review.
Its basic policy is a progressive dividend, while weighing earnings and dividends on equity.Filing ↗
It will keep the payout ratio of 35% or more and the effectively progressive dividend set in its current medium-term plan.Filing ↗
It pays a progressive dividend with a floor of ¥140 a year (¥35 after its share split), based on a payout ratio of 50% or more.Filing ↗
Note: among those needing review, we added Nichimo, which earns 64% of revenue from food, mainly seafood, and Shibusawa Logistics, which earns 93% from logistics such as warehousing and port handling. We did not add Takamiya (scaffolding rental), WILL GROUP (staffing), Maezawa Kyuso Industries (water supply fittings and housing equipment) or Tomoku (cardboard and housing), whose large businesses depend on construction, new homes or customers' hiring. JPMC, which was supported, is not listed because a management buyout tender offer succeeded in October 2026 and the shares are to be delisted.
View detailed resultsThis report is based on annual securities reports as of October 26, 2026.
27 of the 33 companies say in their annual reports that, as a rule, they will not cut the dividend. But 19 of those 27 were not judged to earn half or more of their revenue from businesses whose demand holds up in a recession. Most are in construction, real estate, trading, machinery or leasing, where orders and deals move with the economy.
| Company | Main business | DPS (2020→latest) | Pandemic |
|---|---|---|---|
| Shizuoka Gas | City gas 77% | ¥17→¥43 | Raised |
| Nichimo | Food 64% | ¥50→¥100 | Halved |
| Shibusawa | Logistics 93% | ¥12.5→¥56 | Raised |
Percentages are shares of revenue. Dividends per share are on a post-split basis; Shizuoka Gas's fiscal year ends in December and the other two's in March. Nichimo skipped its interim dividend for the year to March 2021 and halved its annual payout. It adopted a progressive dividend in a later medium-term plan.
The promises themselves are new, too. Shibusawa Logistics adopted its progressive dividend in May 2025, and Maezawa Kyuso Industries switched in August 2025. Hanwa raised its dividend floor (DOE) from 2.5% to 3.5% in its May 2026 medium-term plan. None has yet been through a downturn like the pandemic since making the promise.
A progressive dividend is often a promise that has not yet been through a single recession. With government bonds paying 3%, investors seeking dividends from stocks should look first not at the wording of the dividend policy but at whether the business can support that promise in a bad year.
Katana narrows companies with its own metrics, and AI reads annual reports to judge qualitative conditions. For complex theses and company profiles, the selection you used to do one company at a time, AI now runs across the Japanese market.
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