Discussions by the ruling party's Tax Research Commission over the expansion of NISA, a preferential tax system for individual investors, are reaching a climax.

Expansion of NISA is drawing attention as a concrete measure of the Kishida administration's plan to double asset income.

Will the shift from savings to investment proceed as intended, leading to the revitalization of the market?

(Economics Department reporter Kentaro Makata)

Will there be a shift from savings to investment?

After creating a new NISA system, the ruling party's tax research committee is making adjustments to abolish the investment period and make it permanent, as well as making the period that can be held tax-free indefinite.



On the other hand, the focus of the remaining discussion is on increasing the amount of investment.

With Tsumitate NISA, the maximum investment amount is 400,000 yen per year, with a cumulative total of up to 8 million yen.

How high do you want to raise this?

While there are calls within the government and ruling parties to raise the upper limit, there are also cautious opinions that if the upper limit is raised significantly, the benefits will be disproportionately distributed to the wealthy. It is expected that final adjustments will be made toward



The aim of expanding the NISA is to promote a shift from household savings to investment.

The financial assets held by Japanese households are on the rise, exceeding 2,000 trillion yen as of June this year.



Of these, only 15.5% hold investment assets such as stocks, investment trusts, and bonds.

More than half are still cash/deposits.

The slogan "From savings to investment" was already put up by the Koizumi administration in 2001, and has been carried on by the Abe and Kishida administrations.

Over the past 20 years, the tendency to emphasize savings has not changed, even though the government has continued to call out.



Why?



When I interviewed analysts and others involved in the market, they said,


"The burst of the bubble economy and the collapse of Lehman Brothers increased the tendency to avoid risks

.


"

The analysis showed that


the idea that saving money protects the household budget has spread .


Expansion of NISA, impact on the market?

Will the expansion of NISA change this mindset that emphasizes savings and safety?

And what impact will attracting new investment have on the market?



In the "asset income doubling plan" decided on November 28, the government decided to double the total number of NISA accounts to 34 million and the investment amount to 56 trillion yen over the next five years. .



The market capitalization of companies listed on the Tokyo Stock Exchange's prime market is over 700 trillion yen.



The Bank of Japan is buying ETFs (listed investment trusts) to support the economy, but the amount will reach a record high of 7,136.6 billion yen in 2020, when the spread of the new corona infection began, and will decrease significantly in 2021 to 8,734. It was billion yen.

Even compared to this, the amount of investment of 28 trillion yen added by the government's "doubling" plan is huge.



If all goes according to plan, it is expected to have the effect of revitalizing the stock market.



Seiichi Suzuki, Chief Equity Market Analyst at Tokai Tokyo Research Center, said:

“Many people are worried about their retirement savings, but the number of investors has increased as a result of people working from home due to the new coronavirus. can be expected to have the effect of supporting

According to a summary by the Japan Securities Dealers Association, the number of domestic individual shareholders as of the end of fiscal 2021 will be 14.57 million, an increase of 980,000, or about 7%, from the same period two years ago.



In particular, the number of active workers aged between 20 and 40 has increased significantly.



With the expansion of NISA this time, it is said that there is a possibility that it will be an opportunity to further support the increasing trend of individual investors and eliminate "investment allergy".

There is also a view that expansion of NISA alone will not lead to market revitalization

On the other hand, it is also pointed out that it is unknown whether the expansion of NISA alone will attract new investors.



According to the Financial Services Agency, the number of NISA account openings, which had continued to increase, has slowed down this year.

There is also the view that many of those interested in investing have already joined NISA.



There are also some interesting survey results.

This is a questionnaire survey for those who have a NISA account but have not invested.

Only 15.2% of respondents cited many institutional restrictions, including investment limits, as the reason. Some experts are skeptical.



Yusuke Maeyama, senior researcher at the NLI Research Institute, said, "The change in the NISA system alone is not enough to attract new investors. In the first place, the government and the industry as a whole are required to make efforts to appeal to those who are not interested in investing." talking

What is a neutral advisor?

The government is also aware of this problem, and has included specific measures in its "asset income doubling plan."



Among these, market participants are paying attention to the establishment of "neutral advisors" who provide consultation on asset building.



The British public institution "MaPS (Maps = The Money and Pensions Service)" was used as a reference.

Positioned as a non-governmental public agency responsible for providing financial and pension-related information and guidance, it offers online and telephone consultations on financial transactions, pensions, and debt.



The government will establish the Japanese version of this, the Organization for the Promotion of Financial and Economic Education (provisional name), in 2021, and this organization will certify neutral advisors who do not receive sales margins from financial institutions. It also plans to play a central role in education.

Will the market be activated?

It has been pointed out that the background to the lack of progress in the shift from savings to investment is the long-term stagnation of the Japanese economy and the fact that wealth builders are cautious about taking risks.



Drawing up a growth strategy for the Japanese economy in conjunction with NISA's expansion measures and increasing the number of attractive companies that can be targets for long-term investment will be the key to revitalizing the market.

attention schedule

Next week, pay attention to the US monetary policy meeting (FOMC) starting on the 13th.

Fed Chairman Jerome Powell has hinted at a slowdown in interest rate hikes.

Market interest is growing in the outcome of the meeting to see how much interest rate hikes will be and what impact this will have on the yen.