Cash piles up in Japan while spending wane
Japanese companies and households piled up cash at record levels in the last quarter of 2015, offering little support for an economy that some analysts forecast is at risk of contracting again. Corporate assets in cash and deposits reached a record high of 246 trillion yen ($2.2 trillion), rising for the 29th consecutive quarter, according to Flow of Funds data released by the Bank of Japan on Friday. Households' assets rose to 902 trillion yen, the highest level on record, marking nine straight years of growth.
The data adds to concerns among economists that Japan's recovery continues to be underwhelming after economy contracted in fourth quarter. Households are tightening their purse strings as wages are stagnant while companies are hesitant to invest at home amid global economic uncertainty. "Japan's virtuous economic cycle is quite weak," said Hideo Kumano, an economist at Dai-ichi Life Research Institute and a former BOJ official. "I expect a very fragile recovery this quarter."