Japanese household assets hit record on more savings, stock rises

My net worth has certainly climbed over the past year and a half, thanks to personal investments and working instead of taking holidays, although I realize that many others, like in the restaurant industry, have suffered terribly.

Still, Japan's economy has fared relatively well, when one considers the economic implications of a global pandemic on a trade-dependent country.

The ramping up of govt and BOJ stimulus was the right policy, (as I called for from the pandemic's start). The authorities were also smart to ignore the deluded "e-wrongamists" who warned that the growing national debt (nearly half of which doesn't even exist) would somehow have a negative effect.

Good for you @JeffLee:

“My net worth has climbed over the past year [due] to personal investments & working instead of taking holidays,…” -

but, for the average hardworking Japanese citizens and foreign-origin resident workers, this part is laughable, right?:

“The rise in cash & deposits was also helped in part by the government's distribution of 100,000 yen to all people in the country last year to support households.” -

"...a trade-dependent country."

I've notice that there are so many claims you make that just simply aren't true, if you care to check the facts. In fact, Japan is one of the LEAST trade dependent countries as a percent of their GDP in the world. Just because the elites and the media you care to peruse scream trade, trade, trade, it doesn't make it so.

When will people finally put aside what they think they know and actually discover the truth? Talk about "e-wrongism"!

@Burning Bush, yep. This is why government isn't really that worried with the large debt.

Half is own by the bank while another large part is owned by large japanese companies. And then you have many seniors who likes to receive a stable interests because most don't know what to do with their cash. Only around 13% is own by outside investors. But considering Japan is the world biggest creditor with at least 3 trillion assets, they aren't worried.

People speculate that if Japan debt one day grow so large that it become dangerous, the goverment can always remove the BOJ debt from the list. But it would be considered a very last resort because this move will shake all investors and make them lose trust in the government bonds.

"Overseas investors also increased their holdings, up 10.4 percent to 160 trillion yen, accounting for 13.2 percent."

10.4%!

Good; Japan can carry on as usual.

Moaners will moan anyway.

Japan is one of the LEAST trade dependent countries as a percent of their GDP in the world.

I think you are confusing overall trade with just exports.

I think some Japanese people who have regular jobs or otherwise stable monthly income really increased their savings, because they do not go out so frequently, attractions, restaurants etc. often closed, and do not spend money for travel overseas and like ourselves they do only some short domestic trips often using their own car.

We were planning 3 trips overseas but I am unwilling to pay for quarantine, high airfares, unsure if I can re-enter Japan easily, pay for expensive covid-19 certfied documents etc. and so we are still in our own rooms, go rarely even to restaurants, never used hotels during the last 18 months and the money which we considered to spend for both of us is still in our savings account.

@Hito Bito

I've notice that there are so many claims you make that just simply aren't true

I've noticed that you don't understand a lot of things. Let me explain: Japan doesnt have much in resources, and must import a huge amount of them. To pay for those imports, it must export its own goods.

What's more, many of those exports are high value added, like cars and tech components, which means they've moved along a fairly long domestic supply chain. Everyone - a big number from a big industries - in that supply chain gets paid, which becomes consumption, savings, investment tax revenue, etc. In contrast Canada exports tons and tons of raw wheat with very little value added and a much more limited supply chain that has little effect on anyone not directly employed in wheat farming.

You're welcome.

@Snowymountain

but, for the average hardworking Japanese citizens and foreign-origin resident workers, this part is laughable, right?:

What do you mean by "laughable"? What is your point?

That's $300,000 per household. Not bad.

The US is $121,000 per household.

Assets held in securities surged 32.1 percent to 195 trillion yen after stock prices rebounded after suffering sharp falls a year earlier at the onset of the pandemic.

The value of loans extended by financial institutions to nonfinancial firms rose 7.4 percent to 354 trillion yen, a record-high on a fiscal year-end basis.

The BOJ has been extending support for companies coping with the pandemic fallout, in tandem with the government.

Cash and deposits held by nonfinancial firms rose 15.7 percent to a record 320 trillion yen, or about a quarter of total assets, reflecting their cautious stance on spending. Total assets increased 14.2 percent to a record 1,247 trillion yen.

The BOJ held 542 trillion yen worth of Japanese government bonds, owning 44.5 percent of total state debt that stood at 1,218 trillion yen.

Five paragraphs.......

"Securities"........to quote, pledged as a guarantee of the fulfilment of an undertaking or the repayment of a loan, to be forfeited in case of default.

It is the tax payer, the people of Japan, the poor, the old, the young, you and I that will be left footing he bill.

We will all have to pay back what is owed, as night follows day.

"Securities"........to quote, pledged as a guarantee of the fulfilment of an undertaking or the repayment of a loan, to be forfeited in case of default.

When you buy and then own IOUs you once issued, that cancels out any obligation for repayment. which is kinda obvious...

In the real world, the coupon payments on those JGBs flow back to the MOF.

Just playing with numbers but

Cash and deposits expanded to 1,056 trillion yen, up 5.5 percent, or 54.3 of total household assets, marking the largest on a fiscal year-end basis, according to the BOJ.

100,000 yen x the population is 12.8 trillion. So a factor, but it sounds like belt-tightening and reduced activity due to restrictions has indeed gone on.

Assets held in securities surged 32.1 percent to 195 trillion yen after stock prices rebounded after suffering sharp falls a year earlier at the onset of the pandemic.

The Nikkei is up 30% YOY. If 10% of total household wealth is in Nikkei, that's a further 3% increase in household wealth there. Even if the vast majority own no stock.

The negative impact of the pandemic lingered as people continued to refrain from going out, reducing spending. The rise in cash and deposits was also helped in part by the government's distribution of 100,000 yen to all people in the country last year to support households.

Still quoting this as the sole measure to support households show how K-shaped the pandemic effects have been, just as in previous crises the recipients of significant subsidies like capital holders and those with stable salaried jobs are flush.

The majority though have suffered periods of negative assets, interrupted wages and small subsidies were used immediately for rent and tax bills which were never interrupted.

But leave it to Kyodo to parrot the LDP line.

Jeff, IOU, debt, we borrow, we all have to pay back, or bankruptcy.

If the financial markets were to lose confidence, if the people of Japan not to honor there debts.

You know what will happen next.

Another article that paints a rosy picture of Japan that is completely far from the reality. I guess the accounts of the temp, contract and part time workers that make 40 percent of the work force is flush with cash aided by the 100k yen handout from the government. I guess articles like this are targeted at the millions of non thinking minds.

@rocknroll

> if the financial markets were to lose confidence....

That was the trope among the mainstream e-wrongamists about 5-6 years ago. If Japan's national debt/deficits got bigger, they said, "the financial markets would lose confidence."

What really happened is that the Nikkei then rallied like crazy, up 100% in 5 years, while the debt grew and grew. And so, the e-wrongamists had to shut up and concoct another excuse. The new one is the warning about "central bank insolvency," (which isn't a thing, but they are saying it anyway).

It's one thing to be wrong, but another to be "beyond wrong." Yet soooo many people fall for it. It's funny, but it's not funny.

Japan is doing so well that wages are stagnant-not doing that well for the ordinary Japanese then eh?

@PeterNeil and $300,000 per household. Where can I claim mine? ;8)

The national debt is only going one way though isn't.

"Another article that paints a rosy picture of Japan that is completely far from the reality."

I will carry on believing those figures until the IMF and/or the World Bang say otherwise.

Since they are mute.....