The first-ever plunge in Japan’s household savings rate into negative territory in fiscal 2013 might have been a temporary phenomenon caused by people’s rush to buy goods before the consumption tax hike last April.

Yet, the long-term downtrend in the savings rate is set to continue as the aging of the Japanese population progresses. Whether that results in Japan becoming unable to finance its own debt and having to rely on funds from overseas will depend a lot on the corporate sector, which has been building up its cash and savings in recent years.

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