By Makiko Yamazaki

TOKYO Nearly 70% of companies listed on the top "prime" section of the Tokyo Stock Exchange (TSE) have yet to respond to the bourse's call for better capital efficiency, a request that helped lift the Japanese market to 33-year highs.

The TSE made a rare call in March for firms to disclose plans in the long run to improve capital efficiency, especially if their shares are trading below book value, while setting no specific deadline to avoid companies making premature decisions.

The request, hailed by investors as a remedy to Japan's unusually high number of chronically undervalued stocks, led to a wave of share buybacks and dividend hikes, but results show a majority of firms have yet to come up with solid strategies.

"The call has already prompted responses from a certain number of companies," the TSE said in a document released early this week. But there may be cases where those with higher price-to-book ratios (PBR) take it as unrelated or management feels little need to respond, the exchange added.

According to a survey the TSE conducted in mid-July for companies that close their books in March, 20% of the 1,235 prime-listed companies have come up with specific measures, while 11% are planning on disclosures.

The remaining 69% made no mention in their annual corporate governance reports, where they are required to disclose such measures.

Forty-six percent of companies with PBR below 0.5 times have disclosed specific steps or have said they plan to do so, suggesting TSE's move was a wake-up call for firms trading below book value.

Among industries, banks, most of which are trading below their book value, have the highest disclosures, with about 70% having disclosed measures or planning to do so.

Specific measures include making investments for growth, increasing shareholder returns and revising business portfolios, according to the TSE, owned by Japan Exchange Group.

The bourse also said it has received positive feedback from investors.

"We see clear changes in Japanese companies' attitude (to investors)," an anonymous foreign investor was quoted in the TSE report as saying.

(Reporting by Makiko Yamazaki; Editing by Jacqueline Wong)