British economist’s analysis of the Japanese stock market
A generation that has not experienced the ‘bubble burst’ emerges
Learning stocks through YouTube etc. on a ‘rat-tailed’ salary
The response was, “Let’s invest in beauty products such as Apple instead of Japan.”
At an electronic display board in Tokyo, Japan, two men are watching the Nikkei stock index display. EPAYonhap News
In Japan, the number of young people jumping into stock investment is increasing. There was great antipathy towards stock investment among the public in Japan, which experienced a ‘lost 30 years’ with the collapse of the ‘bubble economy’ in 1990, but as the Japanese stock market has recently broken through daily highs, there is an influx of people, especially young people, into the stock market. . As a generation active in investment emerges, interest is growing as to whether an inflection point will come in the Japanese asset market.
According to the British weekly magazine The Economist on the 28th, the proportion of Japanese people in their 20s investing in mutual funds increased from 6% in 2016 to 23% last year. The investment ratio of people in their 30s also nearly tripled from 10% to 29% during the same period. This is the largest increase among all age groups.
Unlike other countries, the influx of young people into the stock market in Japan is closer to a new change. In the case of Japan, after the stock market bubble burst in the early 1990s, the general public showed great aversion to investment. After a long period of economic stagnation and no inflation, low-risk savings products became very popular. It is for this background that approximately 54% of household assets in Japan consist of cash or deposits, which is higher than in the UK (31%) and the US (13%).
However, with the recent historic bull market reaching all-time highs, it is interpreted that there is a change in thinking, especially among the younger generation. Recently, the Nikkei 225 index surpassed the 39,000 mark for the first time in 34 years and is on the verge of exceeding the 40,000 mark. In particular, this generation is interpreted as being more active in taking action because they did not directly experience the trauma of the ‘bubble burst’ in 1990.
Rising prices due to the low yen can also be interpreted as a reason to turn to investment. In Japan, while the low yen is supporting domestic prices, wage increases are suppressed and consumption is stagnating. The explanation is that this reflects the idea of slightly increasing margin through investment. Mari Saito, a 28-year-old nurse, told The Economist, “I receive a monthly salary of only 160,000 yen, so after deducting rent, taxes, consumption, etc., I have almost no money left.” “In 2020, she decided to buy her own stock. “He said. “She learned about investing through books and YouTube,” she said. “I used to think (stocks) were too risky, but I was surprised to see my assets growing.”
It is assessed that Japanese government policy also played a role. The government improved the small investment tax exemption system (NISA), which does not impose stock transfer tax, raising the annual investment cap from January of this year and extending the tax exemption period indefinitely. As a result, 900,000 new Nisa accounts were opened in the country’s five major investment platforms in January.
In this situation, the stock superintendent is busy. The number of students at a finance school in Tokyo will double since 2022 and now stands at 40,000, the economist said.
Another important point is the emergence of people who prefer investing overseas, such as in the United States. The stocks Mr. Saito invested in also include Apple, S&P 500, and biotech in the United States. However, in this case, there is a difference from the Japanese government’s intention to create a virtuous cycle of personal asset growth and domestic company growth. The economist said, “It is a problem that many young people prefer overseas markets over domestic markets,” but added, “If the Nikkei continues to rise, the approach may change.”
2024-02-28 07:39:38
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