Share prices are picking up worldwide amid a growing sense that the global economy has finally hit bottom. However, we see no big change in the conservative ways Japanese households are managing their assets, which are mainly savings accounts.
The recent jumps in share prices in Japan are largely attributable to nonresident investors. Why? At a time when the public is scrutinizing the benefits of the Democratic Party of Japan's child-care allowances, there are several factors that explain why Japanese households aren't changing the way they manage their money.
The first is that the aftershocks from the collapse of the late 1980s bubble economy and the 2008 Lehman Brothers shock are still reverberating, reinforcing the traditionally conservative behavior of Japanese households. Although many households have invested some of their long-term holdings in stocks, they still have bitter memories of the two stock market crashes, and day trading — the online phenomena that empowered individual investors — hasn't been able to fully recover since the Livedoor shock.