Over the coming decade, Japan will get economic tailwinds from a force never before experienced in economic history anywhere on this scale: the country’s gigantic stock of record household savings will become unstuck. Japan’s famous ¥1,800 trillion worth of “Goldfish stuck in Jelly” will finally be freed.
Unfortunately, this is not because of clever new policy initiatives, financial deregulation or a sudden change of heart from the naturally conservative “Mr. and Mrs. Watanabe” beginning to shift hard-earned savings from the safety of cash and deposits — tansu yokin, or mattress money — into riskier financial assets. No, the real catalysts, and economic variables we can predict with virtual certainty, will be national demographic destiny and death. Yes, the upside of the declining population is that the final journey of Japan’s baby boomers is poised to free up inheritance fund flows of as much as ¥550 trillion (about $5 trillion) over the next ten years alone.