13% say they will use Japan's 100,000-yen cash handouts on investments: survey

TOKYO -- Thirteen percent of respondents in a recent online poll said they would use the 100,000-yen government cash handouts as a resource for financial investment, a smartphone app operator said.

The government of Prime Minister Shinzo Abe is giving out 100,000 yen ($936) each to all residents in Japan as part of economic stimulus measures to counter the coronavirus crisis. Household accounting app operator Money Forward Inc. carried out the survey in mid-May on 7,827 of its some 10 million users asking how they will spend the relief money. Around 60% of the respondents were in their 30s-40s.

The most common answer for the use of the 100,000-yen handout in the poll in which multiple answers were permitted was to "cover living expenses" at 38%, followed by "savings" at 25%, "travel and entertainment expenses" at 19% and "undecided" at 15%. "Investment" came in fifth with 13%, before "education and cultural enrichment" at 10% and "paying taxes" at 8%.

In addition, 10% of the respondents who previously had no investment experience said they started financial investments in the wake of the viral outbreak. Of those, 53% gave "a fall in stock prices" as a reason to try investment schemes.

The cash handout was the prime program of the government's emergency stimulus package laid out in April in response to the spread of COVID-19. According to the Ministry of Internal Affairs and Communications, around 5.96 trillion yen (approximately $55.8 billion), about half of the some 12.73 trillion yen budget allocated for the handouts, had been paid by June 12.

While it can be said that the two most common ways to spend the cash benefit reflected people's anxieties over a decrease in their income due to temporary business closures and heightened concerns for their futures, Money Forward senior executive Toshio Taki said financial investment came in fifth place because "people can invest the relief money with less hesitation than they would with the money they earned themselves through work." He added, "People are spending less money because they are refraining from going outside, and they might have gotten interested in stock investments online (as a way to spend money)."

The Nikkei Stock Average plunged to the 16,000-yen level in mid-March in the wake of the coronavirus crisis, but has since gradually recovered as a result of further monetary easing policies by the Bank of Japan and other circumstances. The stock index surged from late May when the government lifted the state of emergency declaration, and on June 8 Nikkei shares recovered to the pre-pandemic 23,000-yen level. The closing price on June 17 was 22,455.76 yen.

According to an online securities firm, the number of individual investors who opened online accounts surged after seeing a stock price meltdown in March as an opportunity to make investments. Japan Exchange Group Inc. CEO Akira Kiyota told a regular news conference on June 17, "The 100,000-yen handouts are distributed to even those who are not necessarily struggling. There may be some who have spent the money on stock investments."

(Japanese original by Yuki Tsurita, Business News Department)