Analysis:Japanese savers have rediscovered interest rates and banks are feeling it
TOKYO, Nov 6: Japanese savers are rediscovering interest rates and banks are feeling the impact. For years, Japanese savers kept their cash in bank accounts that paid virtually nothing, as few alternatives offered higher returns. However, with government bonds now yielding four times more than deposits, this dynamic is changing.
When the Bank of Japan declared victory in its campaign to lift inflation to 2 percent last week, it signaled the end of near-zero interest rates. Rising bond yields are now making households more sensitive to returns on their money, leading to a surge in government bond purchases and prompting some to shift funds out of bank deposits.
A 46-year-old businessman in Osaka recently moved 600,000 yen from his son's savings account into retail government bonds, finding them far more attractive than bank deposits. While the shift is still modest, policymakers hope households will play a bigger role in funding Japan's massive budget and help fill the funding gap left by the Bank of Japan's dwindling government bond purchases.
Written by urgent.news from Channel News Asia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Analysis:Japanese savers have rediscovered interest rates and banks are feeling it channelnewsasia.com
- Japanese savers move money out of banks as bonds prove more attractive businesstimes.com.sg