Insights

Japanese households had 2.115 quadrillion yen ($14.3 trillion) in financial assets as of the end of June, a 4.6% gain on the year, as a stock market surge boosted their shareholdings in a country known for strong preference for cash.
The total assets crossed the 2.1 quadrillion yen mark for the first time, according to preliminary figures released Wednesday by the Bank of Japan.

Cash and deposits rose 1.4% to 1.117 quadrillion yen. The stock market rally during the April-June quarter buoyed the balances of equity holdings by 26% to 268 trillion yen and investment trusts by 15.9% to 100 trillion yen, both all-time highs.

Cash and deposits continued to represent the majority of the asset portfolio, making up a 52.8% share. Insurance, pension and standardized guarantees accounted for 25.4% of the total, and equities made up 12.7%. Consumers also flocked to government bonds catered to them, with the balance of their debt securities holdings increasing 9.1%.

The BOJ data on the flow of funds also shows that the central bank remained the top holder of government bonds, excluding treasury bills, at 580 trillion yen. The central bank’s share — 53.2% — remained above half for a fourth straight quarter. Yet it slipped a tad from 53.3% in March, the first dip since December 2021. Banks and other depository institutions owned 8.1% of government bonds and overseas investors held 7.3%.

The BOJ has been purchasing government bonds to keep long-term interest rates from spiking. Its buying increased in the January-March quarter to offset strong selling by overseas investors. The latest slide in the BOJ’s share is thought to reflect the central bank’s relatively tame purchases during the April-June period.