A survey by the BOJ (1) found low levels of financial education (just 6.6%), and low financial literacy, as defined by the BOJ (20.9%). At the same time, Japanese households were found to be highly conservative, below.
It is unclear whether low financial literacy leads to conservative household financial management, or that the latter has diminshed the urge to pursue the former.
The survey results indicate Japanese households are overwhelmingly prudent in paying their bills on time (spread score of +80.3, table below), more think long term (spread +30.9), whilst few live short-term (spread -37.4), and very few have too much debt (spread -62.5).
Risk aversion is further evidenced by the negative spread on those prepared to risk losses when investing.
“Spread” below is the percentage of survey respondents that answered strongly agree or agree, minus those that answered disagree or strongly disagree.
| Spread |
| +80.3 – I pay my bills on time |
| +30.9 – I set long term financial goals and strive to achieve them |
| -37.4 – I tend to live for today and let tomorrow take care of itself |
| -62.5 – I have too much debt right now |
| -13.3 – I am prepared to risk some of my own money when saving or making an investment |
For more data on financial literacy in Japan, please follow the link here.
References:
- Financial Literacy Survey: 2016 Results, Bank of Japan, October 2016