Japanese have a yen for hard cash

KAMAKURA, Japan — At a forest shrine lined with incense-burning urns, Japanese pilgrims enter a small cave where they stoop to wash coins and bills in trickling spring water.

Cleanse your money here, the tradition goes, and it will multiply.

The ritual dates back perhaps 700 years, and it says something about the Japanese view of money: an attitude far different from that of many Americans. Cash — cold, hard currency — is a precious, treasured commodity here, something to be treated with reverence.

“I pay for everything in cash,” said Shu Nagaye, a 23-year-old student, as he meticulously scrubbed his paper money and coins — 11,720 yen, worth roughly $105 — all placed carefully in a woven basket.

“When I don’t have money, I control myself and don’t buy anything.”

Like most Japanese, Mr. Nagaye despises being in debt, and unlike most Americans, he avoids it at all costs.

He has used the single credit card he owns only for travel abroad, and took care of that charge in one payment. The only money he has ever borrowed was in small amounts — from friends — and he made sure to repay it quickly.

Such cautious, almost fearful attitudes toward debt are common in Japan, the world’s No. 2 economy. While Americans pile up mortgages and credit card debt, Japanese are reluctant to borrow at all, creating a problem of economic stagnation. While the United States sells U.S. Treasury bonds to cover its expenses, Japan, China and other nations buy them.

Hoarding is common

On a personal level, hoarding cash is so common among Japanese — from bills stuffed under mattresses to gold bars in safes — that there is a phrase to describe the practice: “tansu yokin,” meaning “savings in a chest of drawers.”

Import bag makers such as New York-based Coach Inc. design wallets and coin purses especially for Japanese, who often carry large wads of cash. American billfolds need more room for credit cards, less for paper money and coins.

The Japanese government has tried to encourage business borrowing to break a decade-long economic slowdown by keeping interest rates at virtually zero for four years. Although this policy prevents Japanese from earning much interest on their bank savings, relatively few buy stocks or mutual funds, whose value is liable to change.

U.S. debts far higher

The Bank of Japan says Japanese have $13 trillion in assets — 55 percent of it in cash and savings, and only 9 percent in stocks. Of Americans’ $36.5 trillion in assets, only 13 percent is in cash and savings, and 34 percent in stocks.

Another notable statistic: The United States has twice as many people as Japan, but 23 times as much credit card debt — more than $800 billion.

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