By Daniel Leussink, Akiko Okamoto

TOKYO, Reuters – Japan gave Tokyo bus driver Keiki Nabu and Takako $870 each for their nine children. They spent the money exactly how they had feared, paying off a mortgage rather than going out shopping.

Japanese households have amassed $17 trillion worth of assets in the past few years thanks to this financial prudence. Over half of those funds are saved. This is an issue for policymakers as they struggle to boost consumption and revitalize a sluggish economy.

Fumio Kishida, Prime Minister of Japan has provided cash support to nearly $17 Billion in families. However, Japan is more likely than the U.S. to boost consumer spending because Japan has a lower rate of households saving money or paying back debt such as the Nambus.

This highlights the problem of No. It is the No. 3 economy with a public debt that exceeds the GDP by more than two-thirds.

Takako, 39 years old said that “if dad’s income remains constant but the prices continue to rise”, that all they can do is request him to try his best and do as much work as possible.

The husband earns $44,000 annually. This includes the bonus paid twice per year by Japanese corporations, which is cut in times of financial strain, like during the pandemic. Keiki explained that in the end the stimulus money helps to cover this shortfall.

Children of the Nambus range from less than one year old to 17 years. The family only gives water to the children, but they consume about 5 litres per day. Keiki insists on quick water changes for the kids to reduce their water consumption.

In terms of size, the Nambus are hardly typical – the average Japanese household has shrunk https://tmsnrt.rs/3Go0HeD to 2.21 people as of late 2020 from 2.82 in 1995, according to census data. Tokyo had a smaller average at 1.92.

However, their thrift is not uncommon.

BIG SAVERS

Japan’s GDP includes more than half the private consumption.

Koya Mijiyamae, senior economist at SMBC Nikko Securities, stated that only 10% of stimulus funds are being spent by households and the remaining is being saved. Miyamae said that economic insecurity has kept consumption flat and that Omicron infection rates have made it more difficult to spend.

Hideo Kunoo from Dai-ichi Life Research Institute estimates that approximately 75% of handouts end up being savings. He cautions however that that figure could rise if parents make a greater investment in their children’s education.

Some municipalities paid half the stimulus in vouchers because they were concerned about the money ending up in savings. Tokyo was not one of these.

A July 2020 survey from Mitsubishi Research Institute found that 27% of cash spent on pandemic-related payments was made separately to Japan residents.

This round of stimulus provided $8,700 total for the Nambus – 100,000 yen ($870 per child) and another payment from government.

Initial thoughts were that they might consider an overnight trip with their family to a city ward-run hotel. They decided to spend $210 on sushi and ice-cream, but frugality prevailed.

The money will also be used for Keifu’s school bag and clothing to the gym. Keifu is going to start primary school in April.

After six years of being worn, the hand-me-down clothes from his gym were now too worn.

($1 = 115.3400 yen)