Do Japanese people really dislike stock trading and prefer to deposit money in banks?

Hey, regarding this question, I can chat with you about it. Saying "Japanese people don't like stock investing" was largely true for a very long time, but the situation is undergoing some really interesting changes now. Let's break it down into two parts.

Why the Impression that "Japanese People Love Saving and Dislike Stock Investing"?

This impression isn't unfounded; there are several deep-rooted reasons behind it:

• Historic Trauma: The Collapse of the "Bubble Economy"

  • This is arguably the core reason. Imagine the late 1980s: Japan's economy was booming, Tokyo land prices could supposedly buy the entire US, and the stock market soared like a rocket. Back then, almost everyone was investing in stocks and property, thinking financial freedom was just around the corner.
  • What happened? The bubble burst in the early 1990s. The stock market plummeted, wiping out the life savings of many and leaving them saddled with heavy debt. This generation was burned so badly that a collective memory formed: "The stock market is a casino; you lose if you enter." This fear, like being burned once and never touching the stove again, became deeply ingrained and was passed down to the next generation.

• Decades of "Deflation"

  • This concept sounds technical, but it's simple. Deflation means money becomes more valuable over time. For example, 10,000 yen in your hand today might buy you more goods next year.
  • In this environment, why take the risk to invest? No need! Keeping money safely in the bank, even with near-zero interest, meant your purchasing power didn't decline because the money itself was gaining value. Saving became the safest form of "wealth management," naturally making stock investing much less attractive.

• Cultural and Social Habits

  • Japanese society highly values "stability" and "security." The traditional mindset is: work hard, stay with one company until retirement, receive a company pension, and life is secure. People pursued a predictable, stable life, not "getting rich quick" through high-risk investments.
  • Additionally, Japan's postal savings system (now "Japan Post Bank" / ゆうちょ銀行) is highly developed and ubiquitous, practically the national bank. From a young age, elders teach children to save their allowance and New Year's money. Saving is a deeply ingrained virtue and habit.

But! Things Are Quietly Changing

Although that traditional impression is strong, if you ask a young Japanese person today, the answer might be completely different. In recent years, the situation has reversed:

• Strong Government Push: The NISA System

  • The Japanese government is concerned too. If everyone keeps money in banks, the economy lacks vitality. So, they introduced "NISA" (ニーサ), essentially a "tax-exempt individual investment account."
  • Simply put, profits from buying stocks and funds through this account are tax-free up to a certain limit. It's like the government is giving you a tax break, encouraging you to move savings from the bank into investments. Starting in 2024, this NISA system was upgraded – higher limits, more flexibility, making it incredibly attractive.

• Changing Economic Environment: Deflation Ends, Inflation Arrives

  • Inflation is now global, and Japan is no exception. Prices are rising; 10,000 yen next year won't buy what it does today. Money sitting in the bank is effectively "melting" as purchasing power declines.
  • This forces people to think: What to do? Can't just cling to cash anymore. So, investing in stocks to combat inflation has shifted from an "option" to a "necessity."

• Shifting Mindset Among the New Generation

  • Today's youth didn't experience the trauma of the bubble economy collapse and lack that deep-seated fear of the stock market.
  • Lifetime employment is largely gone. Relying solely on one job's salary and a pension feels insecure for future life. They have a stronger sense of crisis and need to plan for their own retirement.
  • The rise of online brokerages (like Rakuten Securities, SBI Securities) has made opening accounts and trading incredibly convenient. Doing it easily via a mobile app has significantly lowered the barrier to entry for investing.

To Summarize

So, to answer your question:

The statement "Japanese people don't like stock investing and prefer saving" is an accurate description of Japanese society over the past few decades, but it's rapidly becoming outdated.

Think of it this way:

• The Older Generation (over 50): Most still carry that lingering fear and have deep trust in bank deposits.
• The Middle-Aged and Younger Generation (especially under 40): Are actively embracing investment. Driven by government incentives and inflation pressure, moving savings into the stock market is becoming a new trend. The recent Nikkei Index hitting an all-time high has further fueled market enthusiasm.

So, next time you hear that old saying, you can confidently tell people: That's already "ancient history"! In Japan today, a nationwide movement "from saving to investing" is unfolding in full swing!