Retail Savings and Investments in Japan – (COVID-19) Impact Snapshot

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with most countries across the world registering declines in their economic growth for the year to date. Many economists and institutions have cut their forecasts, with many experts predicting the potential onset of recessionary environments.

A similar trend has been seen in Japan, as economic growth in the country dipped in the first quarter of 2020. However, Japan has been able to control the COVID-19 pandemic quite well thanks to robust government measures. As of July 2 there were 18,861 confirmed cases, with the majority of individuals having already recovered. With the government now easing lockdown restrictions, a gradual recovery in the economy is expected.

This report focuses on the impact of the Coronavirus outbreak on the Japanese economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData’s pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

– Japanese retail savings and investments are forecast to contract by 0.6% over the course of 2020, as the economy entered into recession in Q1 2020 thanks to the impact of COVID-19. While eased lockdown restrictions and an upswing in investor sentiment improved stock market performance starting from April, this was only temporary. The threat of a second wave of virus infections continues to disrupt the country’s economic recovery. Consequently, for 2020 we have lowered our retail equity and mutual fund holdings forecasts to -15.2% and -13.4% respectively.
– On the other hand, retail deposit holdings are set to fare better than initially expected due to a flight to safety away from risk assets as well as a move away from cash holdings. More pronounced declines in risk asset holdings mean total retail deposit holdings will expand by 2.2% over the course of 2020, as opposed to the 0.3% decline forecast before the onset of COVID-19.
– The effects on the different segments that make up the HNW market will be disproportionate. The manufacturing sector, which contributes 14% to HNW wealth, has been the among the worst hit as a result of a major supply chain interruptions and a decline in overall demand for non-essential goods.
– On the flipside, the healthcare sector’s importance as a contributor to HNW wealth has cushioned the impact of the pandemic to some extent. The government’s efforts to stock up on protective equipment and find a vaccine have supported this sector. As such, we forecast healthcare’s downturn and hence impact on HNW wealth to be less pronounced.

Reasons to Buy

– Make strategic decisions using top-level revised forecast data on the Japanese retail savings and investments industry.
– Understand the key market trends, challenges, and opportunities in the Japanese retail savings and investments industry.
– Receive a comprehensive insight into the retail liquid asset holdings in Japan, including deposits, mutual funds, equities, and bonds.