News: Japan households amass record financial assets as COVID-19 crimps spending.
TOKYO (Reuters) – Japanese household financial assets hit a new record close to 2 trillion yen last year, half of which was in cash and bank deposits. It was a sign that the coronavirus pandemic was encouraging them to save rather than spend.
The data underscores the challenge policymakers face to stimulate consumption and prevent a return to deflation as the ongoing pain of the COVID-19 crisis deter companies from raising wages and prices.
The balance of household financial assets rose 2.9% year over year to a record 1.948 trillion yen ($ 17.85 trillion) at the end of December, Bank of Japan data showed on Wednesday.
Of that, 1.056 trillion yen was accounted for by cash and deposits as the data showed that curbs kept consumers at home and away from shops and outdoor activities to prevent the virus from spreading.
Financial assets held by the corporate sector rose 6.2% to a record 1,275 trillion yen, of which nearly a quarter was in cash and deposits, according to quarterly fund flow data.
The BOJ’s holdings of government bonds also hit a record high of 545 trillion yen in December, accounting for 44.7% of the total market.
($ 1 = 109,1500 yen)
Reporting by Leika Kihara and Takahiko Wada; Editing by Sam Holmes
Original Source © Reuters