Risk-Aversion Shapes Japan's Economy

And not in an especially lucrative way


Until she took a back-office job at her brokerage in July, Kayoko Okamoto knocked on 100 doors a day trying to persuade residents in some of Tokyo's most well-to-do neighborhoods to sign up for free brokerage accounts. The former saleswoman for Aizawa Securities says she was lucky if she found 10 people a month willing to take a chance. With the Nikkei stock average down 76 percent from its 1989 peak and 1.5 quadrillion yen ($18 trillion) in wealth erased when an asset bubble burst, a generation of Japanese investors has grown up convinced that stocks only go down. "My job was putting up with rejection," says Okamoto. "Most people have no tolerance for risk."

The stock market isn't the only place where the Japanese don't like to take chances. The country suffers from a play-it-safe mentality that's become ever-present in daily life, according to Harvard University sociologist Mary Brinton. "There's a tendency to focus more on potential downsides rather than on opportunities," says Brinton, co-author of A Japan That Turns Its Back on Risk, a book published in 2010. That may explain why regulators held up vaccines approved decades earlier in other countries, why few Japanese students choose to study abroad, and why 844 trillion yen, almost twice the country's yearly economic output, sits idle in cash at home and in savings accounts earning 0.02 percent.