WM Market Reports

Japan Emerges From Its Deflation Slumber - Good News For Wealth Creation - Julius Baer Study

Tom Burroughes, Group Editor, 14 November 2014

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Japan should emerge from its deflationary slumber and enjoy wealth creation, according to an inaugural report on the country by Julius Baer.

Japan is primed to emerge from its deflationary slumber and enjoy wealth creation, according to an inaugural report on the country by Julius Baer, the Swiss bank that has dubbed Asia as its second home market.

The initiative of improving economic linkages in the 10-country block of ASEAN nations of the Southeast Asia region by the end of 2015, coupled with measures by the Japanese government of Shinzo Abe to revive its economy, offer an escape from a multi-decade deflation era for Japan, the study said.

Following a report on Asia and other regions published in recent weeks, the Zurich-listed bank has issued its Wealth Report: Japan, which is a 69-page study of economic and wealth creation prospects in Japan, as well as survey of price trends faced by Japanese in the luxury goods area.

“Ongoing domestic structural growth factors heralded by `Abenomics’ and stronger integration with the ASEAN-4 nations are keys to the revitalisaton of Japan’s economy and its consequent escape from its deflationary legacy,” the report said. (The ASEAN-4 nations are Thailand, Malaysia, Indonesia and the Philippines.)

The report highlights how Western private banks, while they have found Japan a challenging market in which to operate in recent years, still realise that such a large economy represents a potential goldmine. Japan, the world’s second-largest economy, accounts for about half of the Asia region’s cohort of high net worth individuals – there are more than two million of such persons, the Swiss bank said.

In Julius Baer's own case, this bank in January 2013 undertook a 60 per cent equity stake in TFM Asset Management, which is a Swiss-registered independent asset management company founded founded in 1996 and has offices in Tokyo and Zurich.

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