Japanese Households Without Savings Climb to Highest Since ’63
November 8, 2013 Leave a comment
Japanese Households Without Savings Climb to Highest Since ’63
The share of Japanese households with no financial assets rose to a record as falling incomes forced people to dig into their savings, highlighting the potential for widening disparities under Abenomics. The proportion reached 31 percent, according to a Bank of Japan survey released in Tokyo yesterday, up from 26 percent a year earlier and the highest since the poll began in 1963. The BOJ surveyed 8,000 households of two or more people aged 20 years or older from June 14 though July 23.Prime Minister Shinzo Abe needs to convince companies to drive up workers’ pay, so that he can sustain an economic recovery jump-started by fiscal and monetary stimulus and maintain public support. Already facing declines in wages, households will be hit in April by a consumption-tax increase intended to shore up Japan’s finances.
“It’s critical that Abe succeed in convincing corporates to raise wages,” said Izumi Devalier, a Hong Kong-based economist at HSBC Holdings Plc. “Lower-income households may come to feel they’re getting the short end of the stick from Abenomics.”
Among households whose assets fell, 40.9 percent said that declining regular income forced them to draw down their savings — the top explanation. Japan’s salaries extended the longest slide since 2010 in September, with regular wages excluding overtime and bonuses falling 0.3 percent from a year earlier, a 16th straight drop.
‘Grim’ Situation
“The survey shows a grim wage situation,” said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “Now some companies are hinting at higher salaries so we may see a better result next year.”
While the package of policies dubbed Abenomics has weakened the yen, boosted exporters and fueled an almost 60 percent gain in the Topix Index in the past year, income disparities could widen. Households with financial assets saw their average value increase to 16.45 million yen ($167,000) from 15.39 million yen a year earlier, the survey showed. Stocks accounted for 8.3 percent of assets, up from 5.6 percent in 2012.
The average value of financial assets held by all Japanese households fell to 11.01 million yen from 11.08 million yen.
To contact the reporters on this story: Andy Sharp in Tokyo at asharp5@bloomberg.net; Chikako Mogi in Tokyo at cmogi@bloomberg.net
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