As the Nikkei stock index keeps soaring to record highs above the peaks marked in 1989, investing is once more drawing interest in a country that has usually preferred the safety of savings.

But unlike the stock-buying craze that drew in so many people at the height of the bubble economy more than three decades ago, most Japanese remain sidelined this time, seeing little benefit from rising share prices amid struggles to cope with higher inflation and falling real wages.

And many who are investing appear to be motivated at least in part by economic anxiety, in contrast to the heady optimism about the economy that marked the previous investing boom.

A financial data screen in Tokyo shows the 225-issue Nikkei Stock Average closing above 40,000 for the first time on March 4, 2024. (Kyodo) ==Kyodo

Mamiko Maruyama, a 49-year-old employee in the cosmetics industry, attends classes at Financial Academy, an investing school in Tokyo that offers seminars on asset management. She says she turned to investments in the fear that relying solely on her job might not be enough for the future.

The experience of income loss during the COVID-19 pandemic was an eye-opener about the importance of investing, she said, with the Nikkei's recent surges making her consider boosting her investments in Japanese stocks.

"Our generation was always told it was best to save diligently, but that does not help money grow," said the mother of two. "I need to invest more, because I know my salary won't increase sharply."

Rie Fujikawa, a teacher at the Tokyo-based academy, said that she has noticed more people in their 20s to 40s attending the classes over the past few years, joining the seniors who once dominated them.

She has also seen a significant increase in questions about the Nippon Individual Savings Account tax-free investment program, which was revamped this January in line with government efforts to encourage a shift from savings to investments in the equities market, she said.

Reflecting the growing interest in investment among Japanese people, 900,000 new accounts were opened at Japan's five major online brokerages in January alone, according to Tomoichiro Kubota, senior market analyst of Matsui Securities Co.

"The introduction of the new NISA program has significantly broadened the investor base, as most of those opening NISA accounts are people who had never before engaged in stock investment," he said.

Nevertheless, only 14.2 percent of NISA accounts under the so-called "growth framework" allowing investment in individual stocks had been utilized as of March 1, Kubota said, with overseas investors remaining the main driver behind the Nikkei index's recent advance over the 40,000 threshold.

"Individual investors used to be the main players in the Japanese stock market, especially during the bubble era," Kubota said. But their presence has weakened since the burst of the asset-inflated economy in the early 1990s, which was accompanied by plunging share prices, he said.

The percentage of shares held by individual investors in listed companies on the Tokyo Stock Exchange in fiscal 2022 dropped to 17.6 percent from 20.4 percent in fiscal 1990. In contrast, the proportion of shares held by foreign institutional investors surged to 30.1 percent from 4.7 percent in the same period, according to the TSE.

People attend a stock investment class at Financial Academy in Tokyo's Chiyoda Ward on Feb. 20, 2024. (Kyodo)

Underscoring the reluctance of Japanese people to invest in equities, only about 15 percent of household financial assets were held in stocks and investment trusts as of the end of March last year, far behind 51 percent in the United States and 31 percent in Europe, Bank of Japan data showed.

"The proceeds of share increases are not returned to Japanese people. In fact, personal consumption is not growing," said Masaya Sakuragawa, a professor of economics at Keio University.

Japan's household spending declined in January from a year earlier for the 11th consecutive month as salary increases failed to keep up with inflation, according to recent government data.

Growth in Japan's recent real gross domestic product has slowed significantly, far off the around real 5 percent expansion in 1989 and 1990, and it has lost its status as the world's third-largest economy to Germany.

The social atmosphere sharply contrasts with that in the late 1980s when luxury brand goods attracted robust buying and real estate prices continued to surge amid a swell of optimism about the Japanese economy.

Since then, Japan's economic landscape has changed in the face of weakening domestic demand amid an aging and shrinking population, prompting companies to restructure and hoard profits to prepare for risks of global financial crises and geopolitical issues, experts said.

"Back then, the city's atmosphere was entirely different," a 63-year-old self-employed investor said in late February near Shimbashi Station in Tokyo, recalling the atmosphere in the late 1980s at the peak of Japan's economic bubble.

"Now it seems the stock market's gains are only benefiting the wealthy while salaried workers continue to struggle," said the man, who declined to be named.

Ryo Tezuka, a 43-year-old system engineer, said that he has no plans to invest in stocks for the time being because his salary is hardly increasing and he cannot afford to make investments.

"If I were to start investing, it would be a bit further in the future," he said, adding, "I hope that the rise in stock prices will be reflected in my salary."

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