Outbreak blockade money nowhere to spend Japan's household financial assets record in 2020

Financial assets held by Japanese households rose 2.9 percent to a record 1,948 trillion yen ($17.85 trillion) at the end of 2020 from a year earlier, according to data released by the Bank of Japan on Wednesday.

Of the nearly 2,000 trillion yen, 1,056 trillion yen is in cash and deposits, accounting for more than half, the report said. During the epidemic, restrictions put in place to limit the spread of the virus kept people at home from shopping and outdoor activities, prompting people to save rather than spend.

The data highlight the challenges policymakers face in stimulating consumption and avoiding a return of deflation, with companies struggling to raise wages and prices amid lingering pain from the COVID-19 outbreak, the report said.

Financial assets held by Japanese companies rose 6.2 per cent in 2020 to a record Y1,275tn, with cash and deposits accounting for almost a quarter of the total, the quarterly flow of funds data showed.

The BoJ's holdings of government bonds also reached a record 545 trillion yen as of December 2020, accounting for 44.7 percent of the overall market.