Japanese households’ financial assets rising: survey

UNCERTAINTY::Despite an improving job market and broadening benefits of Shinzo Abe’s reflationist policies, 54.1 percent of households’ financial assets are held in bank deposits

Reuters, TOKYO

Sat, Nov 11, 2017 - Page 10

An improving job market driven by Japan’s economic recovery and booming stock prices helped increase households’ net worth this year, a survey showed, suggesting that the benefits of Prime Minister Shinzo Abe’s reflationist “Abenomics” policies are broadening.

Households’ average financial assets rose 6.8 percent from last year to ¥11.5 million (US$101,483) this year thanks to a 25 percent rise in Japanese stock prices, an annual survey by the Central Council for Financial Services Information (CCFSI), a body administered by the Bank of Japan, showed yesterday.

Uncertainty over Japan’s social welfare provisions being maintained among a rapidly aging population prevented households from turning to riskier investments, underscoring the challenge that the central bank faces in nudging the country’s risk-shy population to invest rather than save cash in accounts.

The ratio of households who made ends meet as expected or felt better-off rose to 30.7 percent from 29.2 percent in the previous year, as more people joined the workforce amid a tightening job market, the survey showed.

However, 54.1 percent of households’ financial assets were held in savings and bank deposits, with only 8.9 percent held in stocks, the survey showed.

When asked how they choose which financial assets to hold, 46.6 percent said they would prioritize security such as a guarantee of principal, with only 18.7 percent saying that they focus on profitability.

In a worrying sign for the consumption outlook, a record high 43.2 percent of single households said they had no plans to own a home, more than double the ratio 10 years ago.

While it was unclear from the survey why households preferred not to own a home, it might be because more daycare and other facilities catering to seniors are becoming available in Japan’s aging society, CCFSI deputy director-general Kengo Kato said.

“More people might be feeling that they don’t necessarily need to own a home” in preparing for retirement, he told a briefing.

Japan’s economy likely expanded for a seventh straight quarter between July and September, thanks to robust exports and consumption, a Reuters poll showed.

The Nikkei average hit a near 26-year-high this week on expectations of strong corporate earnings, while the jobless rate slid to levels that the Bank of Japan considers as close to full employment.

However, inflation and wage growth remain subdued, casting doubt over the long-term sustainability of the recovery.

The survey targeted 8,000 households nationwide from June 16 to July 25, with 47.1 percent replying.