Japanese households hold more stocks than insurance for the first time, boosted by NISA
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The Bank of Japan disclosed that Japanese households have increased their holdings of stocks and investment funds to the point of overtaking insurance and retirement assets for the first time since records began in March 2005. At the end of March, Japanese households held 590 trillion yen, or 3.79 trillion dollars, in stocks and mutual funds, exceeding the 579 trillion yen held in insurance, pensions and similar assets, and the gap widened further in preliminary second-quarter data. Overall financial assets of Japanese households stood at 2.52 quadrillion yen at the end of June, up 11% from a year earlier, accelerating from an 8.1% rise in the first quarter. The Nippon Individual Savings Account program, or NISA, which offers tax benefits to investors, has helped draw a new generation of investors into the market, pushing Japanese households' holdings of stocks and investment funds up 44% from a year earlier to 678.96 trillion yen at the end of June, a 14th consecutive quarterly increase and the fourth straight quarter in which the pace of growth in holdings exceeded 20%. Insurance and pension assets rose only 3% from a year earlier to 585.83 trillion yen at the end of June, after rising interest rates prompted customers to review their existing policies. The Life Insurance Association of Japan said the value of surrender payments made by life insurers to policyholders who cancelled contracts came to 7.2 trillion yen between January and June 2026, the highest level for a first half since records going back to 2020 began. Meanwhile, Japanese households held a combined 21.9 trillion yen in government bonds and bonds under the Fiscal Loan and Investment Program at the end of June, the highest level since June 2013, and the Ministry of Finance and Japan's Financial Services Agency are also proposing tax incentives in the tax law revision for fiscal 2027 to encourage individual investors to buy Japanese government bonds.