The typical Japanese millennial is financially conservative, having grown up watching their country’s “Lost Decade” suffer from a devastating economic crisis.
Richard A. Brooks/AFP/Getty Images
Growing up in the early 1990s in the southern Japanese city of Kagoshima, Isechi and his younger brother watched their parents struggle with mortgage and car payments amid Japan’s worst modern economic crisis.
“My mother would often tell us, ‘Never take a loan for anything at all,'” Isechi said.
Isechi might not have heeded his mother’s advice, but he said the financial pains of his childhood continued to govern his mindset.
“The millennial generation in Japan started life in a downturn when the bubble popped and many of their parents were impacted. So the millennials were, just as much or if not more, affected, in many ways,” Seijiro Takeshita, the dean at the University of Shizuoka’s graduate school of management, informatics, and innovation, told Insider.
From 1986 to 1991, Japan experienced an economic bubble during which assets and property prices were vastly inflated.
Then Japan’s asset bubble burst in the early 1990s. The situation was so bad that Japan’s benchmark Nikkei 225 index slumped 40{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} in a single year after the index hit a high of nearly 39,000 in December 1989 — and it still hasn’t recovered after 30 years.
Japan’s GDP grew an average of around 4{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} in the 1980s — but that dropped to around 1{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} to 3{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} for most years since the 1990s.
In particular, the 10 years starting with 1991 are known as Japan’s “Lost Decade,” as the country’s unemployment rate more than doubled from 2.1{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} in 1991 to a historic high of 5.4{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} in 2002.
“Japan’s economy fell into stagnation which has lasted three decades, so the millennial generation has never experienced very good economic situations,” Takahide Kiuchi, an executive economist at the Nomura Research Institute, told Insider.
“These conditions made them more cautious in terms of spending and conservative in terms of working style,” he added.
It didn’t stop at the Lost Decade. Japanese millennials spent their entire lifetimes witnessing disaster after disaster — including the Asian financial crisis of 1997 and the Great East Japan earthquake of 2011.
Takeshita said that the successive disasters and the economic havoc the events wrought shaped Japanese millennials and their worldview. He added that this made them “more realistic than the generation before them,” who reveled in the excess of the country’s economic boom.
But there’s an upside, too.
“They are not like the generation before who are like, ‘go, go, go, work hard,’ work till death — because they’ve seen so much negativity, be it in international affairs or natural disasters,” Takeshita added, referring to the concept of karoshi, or death by overwork. “They didn’t start out with a bubble, so that is quite a big deal. They are sober.”
