Japan households accumulate record financial assets as COVID curbs spending

A gentleman donning a protecting mask walks past the headquarters of Financial institution of Japan amid the coronavirus sickness (COVID-19) outbreak in Tokyo, Japan, Might 22, 2020. REUTERS/Kim Kyung-Hoon

TOKYO, March 17 (Reuters) – Japanese homes gathered a document $17 trillion in monetary belongings as of December previous yr, around four instances the size of its economic climate, as the COVID-19 pandemic retained people housebound, preserving their dollars instead of shelling out it.

Though the disaster in Ukraine clouds the outlook by pushing up gas and living expenses for households, the government’s final decision to end pandemic curbs following week could give use a much-necessary increase.

“Homes may possibly see their buying energy sapped as rates of items like flour and gasoline rise,” mentioned Masato Koike, senior economist at Dai-ichi Everyday living Investigation Institute. “But consumption is probable to recover as Japan pulls out from the pandemic.”

The 2,023 trillion yen ($17.02 trillion) in economical belongings households accrued as of December 2022 was 4.5% increased than year-in advance of levels, central lender info confirmed on Thursday.

Approximately 50 % of the full was held in income and deposits, the details showed, underscoring households’ aversion to dangerous investments.

The quarterly flow of cash information also confirmed the central financial institution held 530 trillion yen value of Japanese federal government bonds (JGB) as of December, earning up 43.4% of the full market.

The quantity was down 2.9% from yr-in advance of levels, the quickest drop since March 2009, suggesting the Lender of Japan (BOJ) continued to steadily taper asset purchases.

Because shifting in 2016 to a plan targeting fascination charges rather of the speed of dollars printing, the BOJ has been slowing its JGB purchasing as its massive presence in the market drew criticism for draining market liquidity.

($1 = 118.8600 yen)

Reporting by Leika Kihara Extra reporting by Kantaro Komiya
Enhancing by Shri Navaratnam and Sam Holmes

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