Japanese MZ Generation Focused on Stocks... 60% of New Accounts Belong to 2030 Generation

"Generation That Experienced Japan's Stock Market Recovery"
Characterized More by 'Long Hits' Than 'Short Hits'

In Japan, where people tended to tie up their money in savings and time deposits rather than investments, the number of individual stock investors has started to increase significantly. In particular, stock investment among the MZ generation (Millennials + Generation Z), born after Japan's long-term economic stagnation, has surged. As the economic recovery and stock price rebound centered on the semiconductor sector gain momentum in Japan, the investment sentiment of the MZ generation is focusing on this trend, signaling major changes expected in the Japanese stock market, which had been extremely stagnant until now.

On the 18th, Nihon Keizai Shimbun (Nikkei) reported, citing the number of comprehensive accounts at Rakuten Securities, that the number of comprehensive accounts at Rakuten Securities has greatly increased to over 10 million this month, fueled by the stock fever among the MZ generation. In September, the number of new accounts surged by 70% compared to the monthly average in the first half of this year (January to June), and in December, the number of new accounts reportedly increased up to 2.5 times compared to the half-year period. A Rakuten Securities official stated, "More than 60% of the new accounts belong to young generations aged 30 or below."

The stock investment craze among the MZ generation in Japan has continued throughout this year. According to the Japan Securities Depository Center (JASDEC), the number of shareholders aged 30 or below reached 1.96 million as of the end of June, an increase of about 70% compared to 1.18 million five years ago.

MZ investors tend to consider purchasing stocks for long-term holding even during a bull market, rather than strictly following the general rule of "buy in a bear market and sell in a bull market." A representative from SMBC Nikko Securities in Japan said, "Assuming a long-term rise in Japanese stocks, investors are likely to become consistent buyers."

Nikkei analyzed, "For the generation aged 50 and above who witnessed the collapse of the bubble economy, the impression remains that the Japanese stock market is stagnant. On the other hand, the Yutori generation (those in their 20s and 30s) and Generation Z, who entered the workforce about ten years later, basically only know a bull market and are therefore more active in investing." Haruka Urata, senior researcher at Fidelity Institute, an investment service company, said, "It has become impossible to succeed in Japan by relying solely on deposits. The generational shift seems to be progressing steadily."

Furthermore, the Japanese government's investment promotion policies are expected to further activate individual investments. The Japanese government plans to implement the "New NISA (Nippon Individual Savings Account)" from 2024 to promote individual investment. This corresponds to South Korea's Individual Savings Account (ISA), and the Financial Services Agency of Japan will raise the maximum tax-exempt limit of NISA from the current 8 million yen (73 million KRW) to 18 million yen (164 million KRW) starting January next year.

As a result, there are voices within Japan saying "not investing through NISA means a loss," and individual investment is expected to become more active in the future. Masatoshi Kikuchi, senior analyst at Mizuho Securities, estimated, "With the expansion of NISA, the annual stock purchase amount by individual investors in Japan is expected to increase by about 300 billion yen (2.738 trillion KRW)," adding, "This is expected to have a certain effect on improving supply and demand."

According to Nikkei, if investment through NISA becomes active and the number of new account openings increases to 1.5 million annually, with an average purchase amount per account of about 300,000 yen (2.73 million KRW), the net stock purchase amount through this channel over five years is expected to exceed 9.7 trillion yen (885 trillion KRW). This scale can absorb the net selling amount by foreign investors from 2015 to 2019, when expectations for Abenomics collapsed and foreign investors sold off all Japanese stocks.

As the rapid depreciation of the yen gradually calms down, foreign investors are also showing expectations for Japanese stocks. Howard Marks, chairman of the U.S. asset management firm Oaktree Capital, said, "A large portion of Japanese household assets are dormant in banks. Once they start moving, the impact on the market will be significant." Nikkei added, "Japanese individual investors have long been immersed in a deflationary world. Overseas firms are also closely watching this change in asset management awareness."