Japan Savings Ratio

Japan has traditionally had a high savings ratio, but, in past decade the savings ratio has fallen to be close to European / US levels.

Graph showing Japan Savings Rates

Japan Saving Rates

Since 1998, though Japanese saving rates have declined.

The graph is a bit hard to read, but, since 2004, Japanese saving rates have been at 2.5- 3.0%

Currently saving rates in Japan are just under 3%.

Why Has Japanese Saving Rates fallen?

• Ageing Population. Old people run down savings
• Increase in retirement age and greater security about state provision for old people
• Changing attitudes of increased demand for current spending rather than passing it on to next generation.
• Upgrading of housing which leads to higher imputed rents.
• Increase in state retirement age to 65
• Prospects of economic upturn in mid 2000s encouraging higher consumer spending.
• Stagnant growth in real incomes for some of this period meant even though savings were falling consumer spending was low.

For more detail and explanation see this pdf and pdf2

Consumer spending in Japan

Even though saving rates in Japan have fallen. Consumer spending still accounts for a low % of GDP

Japan Consumer Spending

During the early 2000s, Japanese consumer spending was struggling to remain positive.

Japan Consumer spending

Sources of Graphs:

• Japan’s economy chasing illusions
• Japanese Financial Crisis