Mitsubishi UFJ Morgan Stanley Securities Co. has recently signed agreements with Japanese junior and senior high schools to help them offer a curriculum that will improve the financial literacy of students.
The move comes after financial education was made compulsory in public senior high schools last year along with the country lowering the age of adulthood to 18 from 20.
The government of Prime Minister Fumio Kishida has made an effort to encourage people to invest their wealth as it seeks to double the amount of investment income generated by each household.
Toshimagaoka Joshigakuen Junior and Senior High School in Tokyo signed the agreement on Feb. 15, followed by Edogawa Gakuen Toride Junior High School and Senior High School in Ibaraki Prefecture on Feb. 22, and Seigakuin Junior and Senior High School in Tokyo on March 9.
Under the agreements, the securities firm and the schools will jointly hold classes from April to give students basic knowledge about the stock market, including its history, as well as information about how to go about selecting and buying company shares, according to an official from the brokerage.
"We would like to enhance the financial literacy of students, who will lead the next generation, and help shift their minds from saving to making investments when they become adults," said Aoi Moriyama, a senior manager in charge of the program at the brokerage.
Japanese households tend to hold much more of their financial wealth in cash savings than people in other countries. According to the Bank of Japan, cash and deposits accounted for 54.3 percent of financial assets held by Japanese people in March 2022, against 13.7 percent in the United States and 34.5 percent in Europe.
The government created the Nippon Individual Saving Account, known as NISA, in 2014 to encourage people to invest in mutual funds, stocks and exchange traded funds to bolster their retirement savings by offering a capital gains tax waiver on income.
Reforms to the system will take effect in 2024, allowing individuals to invest up to 3.6 million yen yearly, with the total investment capped at 18 million yen.
In addition to the government's drive to promote investing, demand for financial education has been growing as parents worry about how to educate their children about the cashless economy.
Although the schools had some ties with the company previously, Moriyama said that the agreement will enable the schools to engage directly, forge a program together, and even consult it when teachers need specific financial knowledge for their classes.
Employees of the securities house and teachers will hold the classes, and at the end of the program, students will come up with a newspaper advertisement that tries to communicate the societal benefits of increased private investment.
"I believe the program will offer students pragmatic knowledge about finance and help build their assets in the future," said Toshimagaoka Joshigakuen's School Curriculum Supervisor Masataka Tsuzuura.