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Cash-loving Japanese savers opt to play it safe

16 Comments
By Karyn Nishimura-Poupee

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16 Comments
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You have it wrong, the old people are buying safes because they can't get to the bank or it is easier for them as they don't understand ATMs. Under 50? You have zero cash because you haven't had a pay increase.

12 ( +15 / -3 )

And that has seen home safes that cost from as much as 20,000 yen fly off store shelves, with sales surging by a fifth last year.

"As much as.....?" That's pretty damn cheap for a "safe".

No to mention that putting money in the bank here is the same as keeping it at home. At least at home you have access to it 24/7!

8 ( +8 / -0 )

Rightly so. Why put in banks for negative rates & charges?

Why put in stocks when it will sooner or later crash from 2 decades high, as the domestic economic shrink smaller & smaller?

The savers had been inflicted and will continue to do so since zero rate policy & bigger government spending trend 20 years ago.

4 ( +5 / -1 )

Both JGB & Nikkei markets are rigged by Kuroda BOJ. The moment zero rate is abandoned, both bonds & stocks will crash. It just a matter of time.

6 ( +9 / -3 )

Probably another reason why the Japanese are quite keen on cryptocurrencies....

-3 ( +3 / -6 )

Ahh Abenomics, he still lives at his mums house because even with his luxurious salery he is too cheep or too scared to buy his own house. He certainly is making it difficult for young people to get ahead.

3 ( +4 / -1 )

Without Abenomics housing will be a lot cheaper in Tokyo & Osaka where the young live. With Abenomics young families face the twin blow of stagnant salaries & much high housing costs. Abenomics are for the wealthy who have land & stocks in the big cities.

9 ( +11 / -2 )

The real reason people are buying safes is MY NUMBER. From next year the Govt. will force people to hand over their bank info and a lot of Japanese are freaking out about it.

14 ( +14 / -0 )

Just like the old days! A 'safe' is safer than under tatami, especially if your new-ish house or condo has none.

3 ( +3 / -0 )

I keep most of my money in cash in the bank. I think banks provide a good service keeping my money safe and available. I have never had any problem. Banks also suffer from low interest rates and difficulty making money on loans.

Having entered investing at the end of the Internet bubble and personally knowing people who lost 80% of their net worth from dropping stocks (in particular one guy went from $800k to $150k, and another lost all $100k in his stock account due to a sudden drop and margin calls), I sleep well with my small but sufficient nest egg of mostly cash and some bonds.

-3 ( +1 / -4 )

With Abenomics young families face the twin blow of stagnant salaries & much high housing costs. 

Wrong on both counts. Stagnant salaries are due directly to employers's own policies, not the govt's. Abe has been exhorting employers to pay more, but they refuse. As for housing, interest rates on mortgages are at an all time low.

Abenomics are for the wealthy who have land & stocks in the big cities.

Wrong again. NISA, accounts where regular savers can easily invest in stocks and other securities for low fees, were introduced during the Abe administration, which is encouraging people to invest more of their cash savings.

I did. And my Nikkei index fund is up 40%. if people refuse to take advantage of what's out there, it's their own fault, not Abe's.

-4 ( +4 / -8 )

a growing number of Japanese are choosing to stash their cash in the humble home safe

They aren't fooled by the Bank of Japan buying up Japanese stocks. How much of the Tokyo stock market belongs to the Bank of Japan now, anyone?

I gather the Bank of Japan is effectively the top shareholder in many Japanese companies now, thanks to its ETF purchases.

But something that must be highlighted is the fact that Japan does have a strong culture of savings. Savings.

Not debt.

Savings.

This is actually very fundamental when thinking about how Japan's unsustainable public spending programs ought be reformed.

Rather than continuing to under-fund them through pay-as-you-go schemes (which are resulting in the government racking up massive public debts), the government should reform these programs and transition to savings based funding models, rather than taxation based funding models.

This would be so very compatible with Japan's culture of savings.

Just imagine how much more comfortable about their future average Japanese would be when they could see that their own savings were backing their retirement, health plans etc.

As things stand your average Japanese faces a double whammy of fear for one's own personal future, but also fear of future tax hikes because of the massive debt and out-of-control government spending programs.

Yet if the government would reform these systems, making them sustainable, then people would have greater certainty about how much money they need to save, and potentially feel happier to spend more, rather than save out of fear, as they do now.

Japan Inc's conservative firms are keeping some 400 trillion yen in reserve equivalent to about 75 percent of the country's entire gross domestic product.

Such statements as these are misleading. Those internal reserves are not cash.

1 ( +4 / -3 )

JeffLee, 

I think there is some merit to the criticism of Abe's policies only being good for the wealthy.

If one is rich enough to be able to qualify for a mortgage in the first place, then yes rates are seriously low - not quite as low as last year before the change to "yield curve control", but still close to those lows. Then in addition to this, the government gives massive tax credits to people with mortages on new dwellings - the credit has been increased under Abe, even. But those low rates and tax credits for those wealthy enough to buy homes are worth zero for those who don't have a "good" enough job to be able to qualify for a mortgage in the first place. So these policies have increased inequality, if anything.

Yes, NISA can be used to by anyone to avoid paying taxes on up to 6 million yen worth of investments (just hope they don't go down in value). But you do need 6 million yen of savings to enjoy the full potential benefit in the first place. Further, in practice, statistics show that the majority of NISA investments are held by the elderly - they are the demographic with all the money in Japan. So again, for those with little savings or ability to save, again these policies have boosted inequality.

But I do agree that people have a personal responsibility to take opportunities presented by the economic environment.

3 ( +5 / -2 )

Banks abroad in countries signed up to the new Common Reporting Standard are obliged to disclose your name and amount of savings to the Japanese tax authorities.

1 ( +1 / -0 )

Know a few antique dealers. There is a supposed rush when old widows suddenly pass away. Not to buy family treasures cheap, but to check under the tatami.

0 ( +0 / -0 )

"Probably another reason why the Japanese are quite keen on cryptocurrencies...."

@Matt Hartwell

No idea why you are being downvoted. I guess people commenting here don't have a clue.

Matt you are right. Japan is bonkers about crypto. The past few months Japan has been the NUMBER 1 trader in cryptocurrency trade volume beating both China and USA. (Korea is jumping on the bandwagon too. Because of the boost of China and Korea recently, that is why we have seen Bitcoin jump from 600$ to 6000$ into just one short year).

But Matt where you might be wrong is that its the day trading guys and companies already big into investing that are trading in crypto. Same with things like Nisa. Nisa was supposed to suck in common folk, but it didn't work. Crypto is the same. Its just day traders and big companies. Japan has some HUGE banks and insurance companies buying ungodly amounts of crypto. One way you can tell the average folk in Japan have next to nothing to do with bitcoins and altcoins, is you can't buying ANYTHING with BTC. And there are only 13 bitcoin ATMs in the entire country as of last week. Lithuania, with a population of less than 3 million has over 70 bitcoin ATMs. When you can buy street food with BTC in Tokyo like you can in NYC, THEN I will concede crypto has finally been picked up by the people of Japan.

(BTW where to find all 1700 bitcoin ATMs in the world https://coinatmradar.com/)

-1 ( +1 / -2 )

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