Japanese household assets rose at the fastest pace in five years last quarter as the weaker yen fueled a stock market rally.
Assets rose 3.1 percent from a year earlier to 1,547 trillion yen ($16 trillion) in the final three months of 2012, the steepest gain since 2007, a Bank of Japan (8301) quarterly report showed today. The Nikkei 225 Stock Average (NKY) rose more than 17 percent over the period.
Rising household wealth may boost consumer sentiment in an economy that emerged from its third recession in five years last quarter, helping BOJ Governor Haruhiko Kuroda in his efforts to end deflation. Goldman Sachs Group Inc. on March 18 raised its growth forecast for the fiscal year starting next month to 2.3 percent from 2.1 percent.
“There is a sense of optimism in Japan and that’s something I haven’t seen for several years,” said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “The increase in assets should give a tailwind to consumer spending and the economy.”
Net household assets -- which excludes housing loans and borrowing through consumer finance -- rose 4.4 percent to 1,193 trillion yen, the highest since 2007, today’s BOJ report showed.
Fifty-five percent of household assets were in cash, the report showed, little changed from the previous quarter.
Consumer confidence in Japan rose to a 5 1/2 year high in February. Support for Prime Minister Shinzo Abe’s cabinet was at 69 percent in March, according to a poll published in the Nikkei newspaper today, down one percentage point from February.
The Nikkei closed 1.9 percent higher in Tokyo, up from the first weekly drop in six weeks, after European Union finance ministers approved a bailout agreement for Cyprus. The yen was 0.3 percent lower at 94.79 per dollar at 3:01 p.m., extending its nearly 18 percent fall since the start of last quarter.
The BOJ’s holdings of Japanese government bonds rose to a record 115 trillion yen last quarter, or 12 percent of all outstanding JGBs, today’s report showed. Foreign investors held 8.8 percent of the assets, or 84 trillion yen, down from a record 9.1 percent in the previous quarter.
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