Japan’s 11-member Nambu family shows allure of frugality, limits of stimulus

      Comments Off on Japan’s 11-member Nambu family shows allure of frugality, limits of stimulus
Japan’s 11-member Nambu family shows allure of frugality, limits of stimulus

Please try another search

Economy6 hours ago (Feb 08, 2022 02:src6AM ET)

2/2

© Reuters. Children of nine brothers of Keiki Nambu and his wife Takako pose for a photograph during their family shopping, amid the coronavirus disease (COVID-src9) pandemic, in Tokyo, Japan January 7, 2022. Picture taken January 7, 2022. REUTERS/Akiko Okamoto

2/2

By Daniel Leussink and Akiko Okamoto

TOKYO (Reuters) – When Japan handed Tokyo bus driver Keiki Nambu and his wife, Takako, $870 for each of their nine children, they spent it exactly as the government had feared: paying down a mortgage instead of going shopping.

That kind of financial prudence has helped Japanese households amass a staggering $src7 trillion in assets over the years, with more than half of that parked in savings. But it also represents a headache for policymakers, who struggle to kick-start consumption and boost a moribund economy.

Prime Minister Fumio Kishida’s government has paid nearly $src7 billion in cash stimulus to families. But unlike U.S. stimulus that lifted consumer spending, the impact is seen as limited in Japan, where households are more likely to save the money or repay debt like the Nambus.

It highlights a consistent problem in the world’s No. 3 economy, where public debt is already more than twice the size of the gross domestic product (GDP).

“If dad’s salary remains the same but prices keep going up, all we can do is ask him to do his best and work as much as he can,” said 39-year-old Takako.

Her husband makes about $44,000 a year, including the discretionary “bonus” paid twice yearly by Japanese companies but cut when times are lean, as happened during the pandemic. In the end, the stimulus money is just helping to make up for that shortfall, Keiki said.

The Nambus’ children range in age from less than a year to src7. Kids only get water and milk to drink, although the family consumes about five litres of milk a day. Keiki makes sure the kids take quick showers to keep the water bill down.

In terms of size, the Nambus are hardly typical – the average Japanese household has shrunk https://tmsnrt.rs/3Go0HeD to 2.2src people as of late 2020 from 2.82 in src995, according to census data. Tokyo’s average was even smaller, at src.92.

Their frugality is common, however.

BIG SAVERS

Private consumption accounts for more than half of Japan’s GDP.

But households may be spending just src0% of the stimulus cash and saving the rest, said Koya Miyamae, senior economist at SMBC Nikko Securities. Economic insecurity keeps consumption flat, Miyamae added, and a recent surge in Omicron infections has also made people hesitant to spend.

Another economist, Hideo Kumano of Dai-ichi Life Research Institute, reckons that about 75% of the handouts will end up as savings, although he cautions that number could be higher if parents decide to set aside more for their children’s education.

Concern that the money would end up in savings prompted some municipalities to pay half of the stimulus as vouchers. Tokyo wasn’t one of them.

Separate cash payments to all residents of Japan earlier in the pandemic saw about 27% of the money spent, according to a July 2020 survey by Mitsubishi Research Institute.

The Nambus received around $8,700 in total from this round of stimulus – src00,000 yen ($870) yen per child and another one-off payment from the government.

They initially flirted with the idea of an overnight family trip to a hotel run by their city ward. In the end, frugality won out, although they did spend about $2src0 on sushi and ice cream.

They will also use some of the money to buy a school bag and gym clothes for Keifu, 6, who is starting primary school in April.

The hand-me-down gym clothes were too threadbare after being worn by six of his older siblings.

($src = srcsrc5.3400 yen)

Related Articles

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Read More