Retail Savings & Investments in Japan: Coronavirus (COVID-19) Sector Impact

Retail Savings & Investments in Japan: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the globe losing 20-50% of their value for the year-to-date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.

A similar trend is expected in Japan, as economic growth in the country is expected to register a dip in the first quarter of 2020 and will decelerate further if this disease is not controlled at the earliest possible opportunity. The decline will have an adverse impact on all sectors, including retail investments.

This report focuses on the impact of the Coronavirus outbreak on the Japanese economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData’s pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

- Japanese retail savings and investments are forecast to contract by 0.6% over the course of 2020, as the already fragile economy is expected to have entered recession in Q1 2020 thanks to the impact of COVID-19. Retail equity and mutual fund holdings are set to take the brunt of the economy’s slowdown, with respective declines of 15.2% and 13.4% anticipated.
- On the other hand, retail deposits and holdings are set to fare better than initially expected due to a flight to safety away from risk assets as well as a move away from cash holdings. However, more pronounced declines in risk asset holdings mean the total retail holdings forecast for 2020 is 1.5 percentage points lower than the forecast before the onset of COVID-19.
- The effects on the different segments that make up the HNW market will be disproportionate. The manufacturing sector, which contributes 14% to HNW wealth, is expected to take a significant hit thanks to major supply chain interruptions.
- On the flipside, the healthcare sector’s importance as a contributor to HNW wealth will cushion the impact of the pandemic to some extent. The government's efforts to stock up on protective equipment and to find a vaccine will support this sector. As such, we forecast healthcare’s downturn and hence impact on HNW wealth to be less pronounced.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Japanese retail savings and investments industry.
- Understand the key market trends, challenges, and opportunities in the Japanese retail savings and investments industry.
- Receive a comprehensive insight into the retail liquid asset holdings in Japan, including deposits, mutual funds, equities, and bonds.