A third of Japan's stock market is owned by foreigners

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Foreigners own 32% of Tokyo-listed shares. It’s a record level, that has been encouraged by Warren Buffett’s high-profile plunge into Japan. By contrast, Japanese households prefer to hoard cash: 54% of Japanese wealth sits in cash deposits, a scar left by the 1990s crash that in the aftermath that saw decades of stock market stagnation.

So what’s the solution. The Tokyo Stock Exchange is working hard to fix this imbalance. It will halve minimum lot sizes this summer, letting blue-chip parcels cost ¥25,000, rather than ¥50,000. The government will also tripled lifetime limits on tax-free NISA accounts and introduced mandatory financial-literacy classes in secondary schools.

Progress flickers. Association surveys show 36% of people in their twenties now own shares, treble 2016’s level. Online brokers report a 28% jump in active accounts, fuelled by micro-investing apps that auto-debit pocket change each payday.

Policymakers want a deeper local investor base to steady market swings and recycle dividends into domestic consumption rather than Californian start-ups. The psychological hurdle is formidable: persuading savers that equities are friends, not traps. Yet, if Japan succeeds, the next Warren Buffett could emerge from Osaka, armed with an index-linked savings plan and, finally, confidence that the post-bubble curse has lifted.

Source: Chartr

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