Japan lost more than a million millionaires last year

Japan lost more than a million millionaires last year

By Roberto A. Ferdman and Lily Kuo October 11, 2013

The greatest consolation to being kicked out of the millionaire’s club may be knowing that your rich friends went down with you. Nowhere is that truer than in Japan, which lost 1.3 million millionaires between June 2012 and June 2013, according to Credit Suisse’s Global Wealth report (pdf) released earlier this week. No other country lost anywhere near that amount of wealth. In fact, no other country lost more than 12,000 millionaires (millionaires, of course, refer to households with $1 million or more in assets). The country with the second highest loss in millionaires—100 times fewer than in Japan—was Brazil. The drop is a stark contrast to last year when Japan saw its millionaire population increase by almost half a million. What’s been obliterating millionaires has to do with ”Abenomics,” the aggressive economic reform plan to defeat deflation spearheaded by Japanese prime minister Shinzo Abe. The policy has driven the yen/dollar exchange rate down by 22% over the past year, which has in turn driven down household wealth by $5.8 trillion over that time period. That’s roughly 20% of the country’s total net worth, according to the report. (The policy also led to a 52% surge in the Nikkei over that time period, but stocks account for less than 10% of household financial wealth.)For another frame of reference, Japan lost more millionaires than there are millionaires in China (1.1 million) and accounted for 98% of the losses in millionaires worldwide. “Japan completely dominates the list,” the report says(p. 23).

But this doesn’t quite mean that the east Asian country is sliding in terms of prosperity. According to a United Nations report last year that evaluated “wealth” in terms of education and skills, natural resources, and “manufactured” or physical assets like infrastructure, Japan is second only to the United States and 2.8 times wealthier than China. Average disposable income for Japanese households is $24,147 a year, above the OECD average and not much below America’s. (Other OECD measures like employment and life expectancy are also higher than the average.) In any case, even if China has now overtaken the country as the world’s second largest economy,  Japan still has more millionaires—about 1.1 million more—than China.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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