Julius Baer Wealth Management Ltd. (JBWM), a subsidiary of Julius Baer Group Ltd. with a focus on discretionary wealth management for Japanese High Net Worth Individuals (HNWIs), has released today the third annual Wealth Report dedicated to the Japanese market. The report follows the launch of the Julius Baer Wealth Report on Asia, emphasising the Group’s commitment to understanding wealth generation in the region. In addition, Julius Baer continues to expand its work on the Julius Baer Lifestyle Index, detailing the cost of living in luxury in Asia, including Japan.

Zurich / Tokyo, 18 November 2016 – Julius Baer has published the third edition of its ‘Wealth Report: Japan’. It consists of three main elements: 

First, the report examines the Japanese context in the global debate over the links between demographics and the real economy. Is an aging society automatically also faced with deflation? What are the trade-offs between age cohorts that benefit from either inflation or deflation? Are we measuring the right indicators to really understand how Japanese consumers are behaving in the current environment? In short, this section seeks to challenge many commonly held assumptions regarding the Japanese economy. 

Second, the publication highlights the findings of this year’s Julius Baer Lifestyle Index, with a special emphasis on Tokyo. In aggregate, the cost of living a luxurious lifestyle in Asia declined by -1.68% in USD terms in 2015-16. In Japan, however, notably items related to luxury travel showed double digit increases, in yen terms. Official statistics underscore that Japan is a key destination for high income travellers from around the world, putting it on the forefront of luxury consumption. Julius Baer expects the trends to continue well into the medium and longer term. 

Last, the ‘Wealth Report: Japan’ looks at the very high levels of cash in Japanese household balance sheets and explores the reasons behind this phenomenon. In traditional portfolio theory, cash has often been seen as a ‘residual’; however, against the backdrop of especially low or negative interest rates and downward pressure on prices, does this assumption still hold? What are the tactical benefits of using relatively high levels of cash in investor portfolios? Julius Baer believes that lessons learned from Japan’s experience in this regard have relevance in a world where low inflation and very low interest rates have become the norm.  

The 2016 ‘Julius Baer Wealth Report: Japan’ is available in English and Japanese under the link on the right.