Japan's Ageing Population: Economic Drag or Investment Opportunity?

Japan has a shrinking and ageing population - slowing economic growth. But it has also proved a boon to certain equity sectors, buoyed by the grey pound

Emma Wall 25 November, 2015 | 2:28PM

This article is part of Morningstar’s Guide to Investing in Asia where we navigate the potential risks for the chance of fantastic rewards from across the region.

Japan’s population is ageing – fast. Faster than any other country in the world. Projections suggest that by 2050 40% of the population will be aged 65 or older. More adult nappies for the incontinent elderly are sold in Japan than nappies for infants. The decline has been sharp too; a few generations ago in 1950 those aged 65 and older made up just 5% of the Japanese population.

This development is having a negative impact on the economy; fewer people in the workforce supporting a growing number of elderly means less money spent on taxes and less money spent on consumption. Such is the drag on economic growth that recently Japan revealed it is in its seventh recession in 20 years.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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