Financial literacy survey shows Japan-U.S. gap in knowledge


A man looks at an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo on Wednesday.

By Saori Kan / Japan News Staff Writer A survey conducted on financial literacy found that people in Japan have a poorer understanding of financial matters than respondents to similar surveys conducted in the United States and by the Organization for Economic Cooperation and Development.

The Financial Literacy Survey 2016 was conducted by the Central Council for Financial Services Information on 25,000 individuals aged 18 to 79. Regarding questions on financial knowledge comparable with those asked in a U.S. survey, Japanese poll respondents answered an average of 46 percent correctly — 7 percentage points lower than the U.S. average.

The topics covered by these questions included compound interest, inflation and bond prices. The biggest gap in knowledge between respondents of the Japanese and American surveys was a question in which respondents were asked to calculate how much a specific amount of money would appreciate after five years in a savings account with a guaranteed interest rate of 2 percent per year, before tax deductions.

In the Japanese poll, only 43 percent chose the correct answer. This was much lower than the result of 75 percent published in the “Financial Capability in the United States 2016” report released by the U.S. Financial Industry Regulatory Authority’s Investor Education Foundation.

Regarding questions that were similar to those in an OECD poll conducted by 14 of its member countries in 2010-11, the average was 58 percent in Japan — lower than Germany’s 67 percent and Britain’s 65 percent.

Poor knowledge can be linked to a lack of financial education. As proof of this, students who had studied finance averaged 56.4 percent, higher than the 38.2 percent average for students who had not. The ratio of respondents in Japan who had done so was only 7 percent, much lower than the U.S. figure, 21 percent.

In the Japanese poll, which also examined decision-making skills for financial issues, respondents were chosen in proportion to the country’s demographic structure — a methodology rarely taken in surveys of this kind — so the results “show a miniaturized Japan,” said Bank of Japan’s Noriaki Kawamura, who is in charge of the survey and financial literacy promotion at the central bank.

The BOJ serves as the council’s secretariat.

He stressed the importance of financial education, saying: “Money management is a critical skill in life for everyone. It’s important to provide more opportunities for students to acquire financial knowledge at school so they can be prepared to deal with the issues after they start working.”

The council will consider increasing the frequency of its financial literacy survey. The previous one, the first of its kind conducted by the council, was carried out in 2011 but was much smaller in sample size, with about 3,500 respondents.

The 2016 poll was conducted from Feb. 29 to March 17, and an English translation of the results has recently been made available on the council’s website (

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