Japan’s savings rate turned negative mode for the first time

Dramatic change from when the Japanese saved nearly a quarter of their income (23.1%) when the savings rate peaked in 1975.

Japan had the highest household saving rate in the OECD in the 1960s until it fell to the lowest. After all, an aging population draws down savings and Japan is the fastest-aging country in the world; its population has been shrinking for a decade.
It’s another blow to the Japanese Prime Minister Shinzo Abe, who just won another term to try and implement his policies dubbed Abenomics. On the campaign trail, he said that Abenomics aimed to raise wages and employment to revive the economy and defeat deflation or price falls.


Japans debt crisis in the early 1990s, the Japanese have been reluctant to borrow on a large scale. So, unless wages rise sustainably, it’s hard to see how household spending can. Without more domestic demand, firms are reluctant to raise wages and invest, which is why they still hold substantial cash.Abe has a  mandate for the introduction of another sales tax hike but the low turnout for his recent re-election sends a clear message that all is not well.3

Retail trade y/y for November, +0.4%
expected 1.1%, prior was 1.4%
Retail sales m/m for November, -0.3%
expected is 0.2%, prior was -1.4%
Industrial Production m/m for November (preliminary reading), -0.6%
expected 0.8%, prior was 0.4%
Industrial Production y/y for November (preliminary), -3.8%
expected -2.4%, prior was -0.8%