America’s Billionaires Love Japanese Stocks. Why Don’t the Japanese?
livemint.comTOKYO—Japan’s government is on a mission to make buying stocks hot again. Many of America’s biggest investors are bullish on Japan. Warren Buffett shared that he increased his investments in Japanese companies during an April visit to the country.
Ken Griffin is preparing to reopen an office in Tokyo for his hedge fund, Citadel, and investment banks Goldman Sachs and Morgan Stanley have issued optimistic outlooks for Japan’s stock market. Japan’s problem is this: There are few signs its estimated 125 million residents share in the excitement. Burned by dismal returns since the bursting of Japan’s asset bubble in the late 1980s and early 1990s, generations of families here have stashed most of their money in low-yielding savings accounts rather than trying to increase their wealth through the stock market.
Japanese households put an average of just 11% of their savings into stocks and 54% in cash and bank deposits, according to Bank of Japan data released last month. That trails well behind the U.S., where households have about 39% of their money tied up in the market and only 13% in cash and bank deposits, according to Federal Reserve data. Haruyo Arai, a 62-year-old office worker, began investing in the stock market just last month.
“I was brought up by parents who would say, ‘Don’t dabble in stocks,’ " she said. Japanese Prime Minister Fumio Kishida has pledged to double households’ asset incomes, in part by encouraging people to invest in risky assets like stocks. The government is raising caps for Japan’s tax-exempt investment system for small investors, the Nippon Individual Savings Account, with changes set to take effect in January.
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