Japanese savings shrink

The Nippon Keizai Shimbun is reporting today that

"Japanese household financial assets totaled 1,433.5 trillion yen at the end of December, falling 5.7% on the year to a 4-year low, the Bank of Japan's preliminary data released Tuesday showed. This is the sharpest annual drop on record.

Slumping stock and investment trust prices took a toll on household assets. Stock holdings plunged 40.2% on the year to 87.8 trillion yen, while investment trust beneficiary receipts decreased 33.4% to 47.9 trillion yen.

In contrast, as Japanese sought to stash money in safer places, cash bank deposits inched up 0.9% to 791.6 trillion yen, 455.1 trillion yen of which were in time deposits, up 2.5%."

The highlighting is mine...this is not good news for a country where a large proportion of the population is expecting to live off of savings fairly shortly. Further, Japanese consumers are unlikely to provide a boost to GDP as they are not going to increase discretionary spending in the face of investment losses.