Japan households accumulate report monetary belongings as COVID curbs spending

A person sporting a protecting masks walks previous the headquarters of Financial institution of Japan amid the coronavirus illness (COVID-19) outbreak in Tokyo, Japan, Could 22, 2020.REUTERS/Kim Kyung-Hoon

TOKYO, March 17 (Reuters) – Japanese households amassed a report $17 trillion in monetary belongings as of December final yr, roughly 4 instances the scale of its economic system, because the COVID-19 pandemic stored shoppers housebound, saving their cash as an alternative of spending it.

Whereas the disaster in Ukraine clouds the outlook by pushing up gasoline and dwelling prices for households, the federal government’s choice to finish pandemic curbs subsequent week might give consumption a much-needed enhance.

“Households may even see their buying energy sapped as costs of products like flour and gasoline rise,” mentioned Masato Koike, senior economist at Dai-ichi Life Analysis Institute. “However consumption is more likely to get well as Japan pulls out from the pandemic.”

The two,023 trillion yen ($17.02 trillion) in monetary belongings households amassed as of December 2022 was 4.5% greater than year-before ranges, central financial institution information confirmed on Thursday.

Roughly half of the full was held in money and deposits, the info confirmed, underscoring households’ aversion to dangerous investments.

The quarterly move of funds information additionally confirmed the central financial institution held 530 trillion yen price of Japanese authorities bonds (JGB) as of December, making up 43.4% of the full market.

The quantity was down 2.9% from year-before ranges, the quickest decline since March 2009, suggesting the Financial institution of Japan (BOJ) continued to steadily taper asset purchases.

Since shifting in 2016 to a coverage focusing on rates of interest as an alternative of the tempo of cash printing, the BOJ has been slowing its JGB shopping for as its large presence out there 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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