Japanese households will have up to (¥23trn) $187bn to invest over the next five years, according to a report from Nomura Research Institute and Cerulli Associates.
Sadayuki Horie, senior researcher at NRI, said this figure includes maturing Japanese government bonds (JGB) and lump-sum retirement benefits due to the aging population.
NRI estimated that aged households will pull ¥6trn out of retail JGBs each year over the next five years.
“Including both proceeds from maturing JGBs and lump-sum retirement benefits, households will have up to ¥23 trillion available to annually invest over the next five years,” Horie said.
The firm believes ¥18 trillion will flow into ordinary bank deposits annually.
The average share of household financial asset inflows over the past five years devoted to risk assets was 20%-30%, most of which went into equity investment trusts.
“If this share remains unchanged, risk assets will see annual inflows of around ¥5 trillion over the next five years,” noted Yoon Ng, Asia research head at Cerulli.
The aging of the Japanese society has already reached a level beyond that of any other country, data from the United Nations show. The UN defines a country as aging when 7% of its population is 65 or over. Statistics from the Japanese government show that 25.9% of its citizens is 65 or over.
