21 March 2025 | Other

Japanese consumers' cash holdings shrink as inflation rises

Japanese consumers' cash holdings shrink as inflation rises

Japanese households' cash holdings shrank at a record pace last quarter amid rising costs of living. The amount of cash held by the country's citizens fell to 105.3 trillion yen (about $704.9 billion). That was 3.4% lower year-on-year.

The drop was the largest since 1998. As Bloomberg pointed out, such dynamics indicate the shift of the Japanese population to cashless payments and the growth of nominal consumer spending in the face of inflation.

At the same time, there was an increase in household assets in investment trusts. The growth of this indicator reached a record level, as more private investors preferred this type of asset. According to the agency, the number of Japanese government bond holders also grew at the highest rate since 2007.

Japan's inflation is rising faster than expected and remains above the central bank's 2% target, official data showed last Friday. Consumer spending, not adjusted to price increases, hit a record high.

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