Japanese Financial Market Size Projections Based on the Demographic Segmentation

Kohei Wada, Chuo University
Kenta Iizuka, Chuo University

In Japan, the baby boomers are entering retirement in recent years. Their retirement allowances must build up massive household financial assets. With these demographic situations, aging people will hedge the risk to maintain their longer life and to transfer their earnings inside their life cycle or across generations through the financial assets. Saving behaviors are surveyed generally by households, not by individuals due to the statistical restrictions. We, however, transform from the households’savings to the individuals’one by segmenting of demographic characteristics. Demographic segments of each financial asset correspond to the individual propensity to save on the perspective of demography. Meanwhile, the future segmented population can be demographically projected. The market size for each financial asset depends on the trends of the individual propensity to save and/or of the segmented population. Finally the size of the market for each financial asset in Japan was predicted by the middle of this century.