Japan, once a country of savers, appears to be changing.
A Bank of Japan survey shows a record drop in savings this year. Some 51 percent of households say their savings fell since last year, while the number of families with no money saved hit a 40-year high of 22 percent.
Richard Koo, an economist at Nomura Securities, says unemployment and deflation are the biggest factors in the drop in savings. "The problem is that a lot of people are losing income and a lot of people are losing jobs, and the pay is not growing at the rate they expected in the past," he explained. "So quite a few people are now forced not to save in order to maintain their standard of living."
Meanwhile, the yen is rallying on hopes that Japan's fragile economic recovery may be accelerating. The Japanese currency is the strongest performer against the (US) dollar this quarter, gaining almost 7 percent.
HSBC, one of the world's largest banks, has revised its forecast for the yen, predicting it will reach 107 per dollar by the end of the year. The yen is now trading around 112 on the U.S. currency. Many analysts say Japan's improving economic outlook will attract more investment to fuel the yen-buying trend.
Japan's most popular fast food chain is streamlining its management ranks. The Japanese unit of McDonald's, the American hamburger giant, says it will trim 130 management positions.
The decision reflects the company's sluggish sales. Last year, it posted its first annual loss of $21 million. Founded in 1971, McDonald's Japan has almost 3,800 outlets across the nation.