Japan has been hit by investing fever

Subscribe to enjoy similar stories. It is not difficult to spot the change. Bookshops now dedicate entire sections to financial guides.

Trains are plastered with advertisements for investing seminars. Financial influencers command enormous online audiences with tutorials on how to build a portfolio or open a brokerage account. As Ponchiyo, a 31-year-old YouTuber with almost 500,000 subscribers, puts it: “People are realising it is wasteful to leave money sitting in savings." At the end of 2023, cash and bank deposits of ¥1,128trn ($7.6trn) counted for over half of Japanese household assets, compared with less than a third in Britain and an eighth in America.

Then, in January 2024, the government overhauled its NISA scheme, a tax-free investing option modelled on Britain’s ISAs. The scheme has proved much more successful than ministers anticipated. Investors have opened 5m new accounts.

And earlier this year, assets in NISAs reached ¥59trn, having hit the government’s target three years ahead of schedule. Japan is at a “turning point", as Kishida Fumio, a former prime minister, put it at a recent conference. The shift is “a test of whether it can leave behind its deflationary past and embrace growth".

After Japan’s asset-price bubble burst in the early 1990s, years of deflation and stagnation left savers wary of risk. Today, though, economic developments are creating additional incentives to invest. Japan’s core inflation has reached 3.7%, the highest in the G7, which erodes the value of idle cash, especially given the country’s relatively low interest rates.