Wealth Management in Japan 2007

Datamonitor's Wealth Management in Japan 2007 focuses on the onshore liquid wealth of mass affluent and high net worth customers in Japan. It provides detailed analytical views of macro-economic background, trends in retail savings and investments growth, mass affluent and high net worth individuals, competitive dynamics and forecasts.

Report Highlights

The Japanese economy has had its ups and downs over the past decade, with GDP growing less than one percent in five of the last 10 years. Japan has been adversely affected by a number of events including the Asian economic crisis in 1998, the tech bust of 2000, and the global economic slowdown during the 2001-2003 period. As for much of Asia, deposits remained the largest retail liquid asset for onshore investors over the 2002-2006 period. Despite deposits being the largest liquid asset in the market, the value of investment has decreased slightly as investors seek greater returns on their money. Japan is set for declines in both its wealthy population and the onshore liquid assets they hold. Datamonitor has taken the view that global stock markets will see a significant correction in the course of 2008, and will continue to be volatile in 2009.
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Overview 1
Catalyst 1
Summary 1
Table of figures 3
Table of tables 4
Market overview 5
After nearly a decade of instability, Japan is showing signs of recovery 5
Recent GDP growth has improved but remains low 5
The country's deflation history may be turning around 6
Interest rates are low, but increasing 6
The stock market has been increasing 8
Despite poor economic performance, Japanese households remain net savers 9
Despite difficult market conditions, Japanese onshore retail liquid assets are growing 9
Although a shift in asset class is apparent, as Japanese investment in deposits have dropped 10
Japanese residents have been investing more into equities 10
Direct bond investment has grown the quickest 11
Mutual fund investments have been growing fast 11
Non-liquid assets are an area of interest for investors 12
National property prices have been on the slide 12
Japanese equities are on the rise 14
Hedge funds have become popular 14
Overnight Index Swaps have emerged in the last year 16
After declines in population and stagnation in onshore liquid assets, Japan's wealthy population recovered by 2006 16
There were more than 35 million wealthy individuals in Japan by 2006 16
Wealthy individuals in Japanese currently hold USD7.7trn in onshore liquid assets 17
Japan is set for declines in both its wealthy population and the onshore liquid assets they hold 18
A predicted UK downturn 18
A predicted US downturn 19
General 19
The wealthy Japanese population will not recover its 2007 balance by 2011 20
Onshore liquid assets will exceed USD8.2trn by 2011, after falling in 2008 and 2009 21
Data 22
Competitive Dynamics 29
Competition in Japanese wealth management is intense, and may increase further if regulations are relaxed 29
All the largest local banks target wealthy clients, generally with more than JPY100m 30
The foreign banks give local banks a run for their money 30
Many of the largest securities companies are owned by the local banks, but current regulation hinders the sharing of information 32
Wealth Management profiles 33
Mizuho Holdings Incorporation 33
The Bank of Tokyo-Mitsubishi UFJ 34
Sumitomo Mitsui Banking Corporation 34
Citibank 35
HSBC 35
Société Générale 35
APPENDIX 36
Definitions 36
CAGR 36
HNW 36
Liquid assets 36
Retail 36
Mass affluent 36
Mass market 37
Methodology 37
Global wealth Model 37
The UK sub model 37
Global sub model (for all other countries) 37
Forecasting methodology 37
Continuous refinement to the understanding of liquid wealth distribution 38
Datamonitor's wealth numbers compared with other wealth numbers 38
Further reading 38
Ask the analyst 39
Datamonitor consulting 39
Disclaimer 39
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Table 1: Japan's macro-economic factors, 2002-2006 22
Table 2: Tokyo Stock Exchange, Market Capitalization 1999-2006 22
Table 3: Japanese onshore retail liquid asset balances in JPY, 2002- 2006 22
Table 4: Japanese onshore retail liquid asset balances in USD, 2002- 2006 23
Table 5: Retail Property Prices in Japan, 2002-2007 23
Table 6: Commercial Property Prices in Japan, 2002-2007 24
Table 7: Hedge fund growth, 2002-2007 24
Table 8: Aggregate onshore liquid assets segmented held by wealthy individuals, by liquid asset band, 2002-6 25
Table 9: Number of wealthy individuals segmented by liquid asset band, 2002-6 26
Table 10: Aggregate onshore liquid assets segmented held by wealthy individuals, by liquid asset band, 2007-11 27
Table 11: Number of wealthy individuals segmented by liquid asset band, 2007-11 28
Table 12: Selected foreign wealth brands in Japan, 2007 31
Table 13: Selected securities firms in Japan, 2007 32


Figure 1: The Japanese economy is showing signs of improvement 7
Figure 2: Tokyo Stock Exchange has increased 123%, over the last five years 8
Figure 3: Japanese onshore liquid retail assets, 2002- 2006 10
Figure 4: Nation-wide retail property prices have dropped but not in the largest cities of Japan 13
Figure 5: Japan hedge funds have been growing strongly in the last 5 years 15
Figure 6: Wealthy individuals in Japan declined in 2004 but recovered by 2006 17
Figure 7: Aggregate onshore liquid assets held by wealthy individuals stagnated in 2003-4 18
Figure 8: The number of wealthy Japanese will just recover their 2007 level by 2011 20
Figure 9: The aggregate onshore liquid assets of wealthy Japanese will start to accumulate again after declines in 2008 and 2009 21
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