Japanese Save More Than in Any Other Nation

The average Japanese family had stashed away $86,250 in savings as of 1989, confirming Japan’s place as one of the world’s most frugal countries, the government has announced.

The average family added 15.3% to its already large nest egg in 1989, the highest growth rate since 1979, the Management and Coordination Agency reported Friday.

The United States has complained in trade negotiations that Japan’s high savings rate is a contributing factor to the massive U.S. trade deficit with Japan, which stood at $49 billion in 1989.

Japan’s household savings rate, or the percentage of annual income an average family puts into savings, stood at 15.1% in 1989, one of the highest in the world.

By comparison, Americans saved on average only 6.3% of their income in 1989. The British saved 4.9%, and French and West Germans saved about 12%.

The household savings rate does not include the value of the family home or other real estate.

The Americans argue the Japanese tendency to save a large portion of their income keeps their spending down. The result is they buy fewer goods, including imported goods from the United States.

The Japanese have turned the argument around, saying the United States could improve its economic situation if it saved more.

They argue a high savings rate makes more money available for investments and drives interest rates lower.

Both countries have listed savings rates as a structural barrier to balanced trade in the ongoing trade negotiations dubbed the Structural Impediments Initiative.