Japanese Housewives and Why They Rule the World

Perhaps when one talks of “the financial world,” it may evoke images of powerful finance ministers pulling the strings behind closed doors. Perhaps it conjures the image of the nondescript building of Goldman Sachs. Or, perhaps, it doesn’t really call to mind very much at all.

The truth of the matter is, if the financial world is a boat in rough waters, then at the helm are Japanese housewives.

For years, both the central banks of Japan and America have been boggled by why their monetary policies seem to have very little effect on the marketplace. Alan Greenspan, former chairman of the FED, famously proclaimed that this new world in which central banks no longer hold very much authority a “conundrum.”

In other words, the big dogs (i.e. the government and the savvy investment banks) were no longer calling the shots in the world of finance.

So who took over? Who is this enigmatic man that has suddenly taken the reins of power?

The answer may be surprising. This man, against historical convention, isn’t Caucasian. In fact, he isn’t very much of a man at all.

He is, in fact, a she, and she is none other than what The Economist now calls “Mrs. Watanabe:” the amalgam of Japanese housewives that have at their disposable nearly all of Japan’s household savings.

This reality is perhaps best expressed in David Smick’s book The World is Curved.

Smick, a famous financial consultant, observes:
“the Japanese system, once brilliant at controlling bureaucratic image and substance, is today facing its own fragile world that is curved. Now millions of [Japanese] housewives and other market decision-makers care little about bureaucratic image and power. They care about information-facts and insights that reflect future rates of return and risk. They care little about bureaucratic power because, in today’s brave new world, they collectively now are the power.”

“by the beginning of the twenty-first century, the frustrated housewives (and/or herads of households) had had enough of the economy’s poor performance, particularly its poor returns on savings account investments […] the housewives, taking financial matters into their own hands, began to hunt for a greater return on their savings.”

 

And here, perhaps, is where the changing landscape is best expressed:

In the world of currency trading, a common question lately has become: “what are the [Japanese] housewives investing in these days?”

Today, in a world where liquid capital is scarce and where Japan holds a great amount of the world’s reserves, Japanese housewives are the key players in deciding where future investments will be made.

If you want to know where best to invest your 401k, your best consultant is the apron-clad housewife walking her dog in Japan.

//By Ryo TAKAHASHI

2 Responses to “Japanese Housewives and Why They Rule the World”

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