The Japanese are known to be savers and conservative spenders. But the attitude may be changing, according to a recent study which shows the nation to be most willing to take financial risks in the Asia Pacific.
Japan’s Generation X and Y consumers, aged between 20 and 40 years old, have become the most risk-taking market segment in the region, overtaking Australians and Hong Kongers, a survey from reinsurance giant Swiss Re finds.
“Young consumers are more willing to take risks in financial areas,” Clarence Wong, Chief Economist Asia at Swiss Re tells CNBC on Thursday.
Compared to Japan’s older generation, who are conservative in managing their financial assets, the country is seeing a change with a “more aggressive” younger generation, Wong says.
The survey, which measures consumer attitudes across 11 countries in the region, also shows people in developed markets more willing to take financial risks compared to their emerging market counterparts. Japan, Australia, Hong Kong, South Korea and Singapore are ranked top five on the list, while countries like Malaysia, Vietnam and Indonesia are ranked at the bottom.
The younger generation may be more likely to take financial risk, but Wong says they are less aware of how to mitigate risk.
“A lot of the individuals think a lot about their financial futures but actually many of them do not have any specific plans to follow through, and that is actually the case in many Asian markets,” says Wong.
Contributing to the problem is a widespread misperception on life expectancy in Asia.
People are underestimating how long they are going to live and many don’t fully understand the sufficient level of financial resources needed for retirement, according to Wong.
“The young people [in Japan] — they think they will live nine years shorter than the official figure, and in some markets like Malaysia, the young people think that they live or they will live 15 years below the official figure.”