Putting savings in the bank and earning interest is a long-forgotten experience for the Japanese. Since the 1990s, interest rates in Japan have remained near zero, with ordinary deposit rates at major Japanese banks at 0.001%. Even if you deposit 1 million yen, the interest for one year is only 10 yen (0.5 yuan).
However, with changes in the economic situation, the Japanese banking industry is quietly undergoing a transformation. Large banks such as Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho have recently raised their 10-year fixed deposit rates from 0.002% to 0.2%. Although the interest is still low, it has shown a reversal in the direction of the Japanese financial industry. It is worth noting that Sumitomo Mitsui has not adjusted its deposit rates for 12 years.
Compared to Europe and the United States, Japan has a higher proportion of deposits, with most of them being the assets of the elderly. Due to concerns about their retirement, elderly people in Japan have been depositing their pensions and retirement funds in banks. In addition, due to difficulties in investment, corporations and institutional investors have also significantly increased their deposits.
The Japanese government's call to &#34;transform savings into investment&#34; seems to have had little effect. This reflects the common people's pursuit of capital preservation and security. Despite the lack of wage increases in the past 30 years, the years of deflation have led most Japanese people to put more than half of their assets in bank accounts with no returns. After all, deflation does not lead to a decrease in purchasing power, and most Japanese people only seek capital preservation.
Data released by the Japanese Ministry of Internal Affairs on November 24th showed that Japan's CPI (Consumer Price Index) in October increased from 3% in the previous month to 3.3%. The core CPI, which excludes fresh food prices, increased from 2.8% in September to 2.9% in October, marking the 19th consecutive month that it has exceeded the Bank of Japan's 2% inflation target.
With inflation consistently exceeding the Bank of Japan's price target, the end of the negative interest rate policy is approaching, and more and more Japanese people are hoping to obtain higher returns.
Compared to many other countries with deposit rates as high as 5%, 0.2% may seem insignificant. However, in Japan, as deposit rates increase, consumer attitudes are also changing. For the first time in decades, the Japanese are actively seeking better returns for their money.
Analysts point out that if wages in Japan continue to rise, leading to a stable economy and rising stock prices, people's funds will naturally shift from bank deposits to investment products. Some banks may see a faster decrease in deposits compared to others, which could spark competition in deposit rates among different banks.

For the first time in decades! In Japan, you can finally earn interest on your savings.

A Landmark Event! After a decade of "zero interest rates on deposits," the Japanese banking industry has started raising interest rates.