Everyone thinks of Japan as a nation of savers. Stop the blighters from saving and get them to spend instead, it is often said, and the country's economic woes would be over.
In reality, it's a bit more complicated than that. In fact Mrs Watanabe no longer saves that much. The last time I looked, she was down to the sort of pitiful savings ratio we see in the UK and the US. At the vanguard of the ageing process, in fact Japan is moving into that phase of demographics where in aggregate, households may soon be in savings drawdown, rather than further adding to them.
But the same is not true of companies. Poor levels of domestic demand means that in aggregate, there is not enough to invest in, even though Japanese companies are big investors in the future. The consequent surplus is recycled into J-bonds instead, where it finances the deficit. (telegraph.co.uk)
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