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The story
Following the Bank of Japan’s additional rate hike, Japan’s three megabanks — Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho — announced they will raise ordinary deposit interest rates to 0.5% starting November 2nd. That’s 500 times the 0.001% rate seen in March 2024, before the negative interest rate policy was lifted. According to calculations by the Yomiuri Shimbun, this will hurt the household finances of younger generations carrying mortgages, while benefiting older, savings-heavy households. On 5ch, discussion centered on whether this framing is fair, and why more people didn’t lock in fixed rates back when interest rates were low.
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Impact on household finances from the rate hike (chart omitted)
On the 18th, Japan’s three megabanks — Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho — announced they will raise their annual ordinary deposit interest rate by 0.1 percentage points to 0.5%, effective November 2nd. That’s 500 times the 0.001% rate from March 2024, before the Bank of Japan lifted its negative interest rate policy.
Source: yomiuri.co.jp / Original article here
What people said
If you look at a 100-year interest rate chart, the zero-rate period is clearly the anomaly.
Homebuilders pitched low rates as a golden opportunity plus inheritance-tax planning, and got tons of people to put up apartment buildings under 'sublease' master-lease schemes.
Now the rate-review dates are coming due one after another.
For landlords who are like 80 years old, banks jack the rates way up.
It's fine in city centers where land prices climbed, but rural areas haven't appreciated at all.
Rent hikes aren't even possible under sublease contracts, so collateral value collapses and a wave of 'black-ink bankruptcies' (going under despite being profitable on paper) hits all at once.
Fixed rates cost more than variable because the bank carries the risk of a negative spread (paying out more than it earns). Getting lured in by the lower short-term payment is basically like those 'zan-kure' balloon-payment car loans (residual-value credit plans).
Why? Because you pay down principal while the balance is still big, then make early repayments once rates climb, all while maxing out the mortgage tax deduction (1%, 13 years, obviously). You wouldn't get it — broke people like you can't even afford a house, right?
If they don't raise it, we're in for brutal yen depreciation.
That'd be great news 😆
Don't they need to push it to something like 4-5% before the weak yen actually corrects?
The reason people take out loans in the first place is that they can't afford early repayments.
People who actually can do that probably have cash reserves backing them up too, so it's not that big a deal for them.
Most people on variable rates never planned for that (or can't).
Didn't the Baby Boomers actually miss the high-growth era's heavy lifting? That was the fearless, reckless generation from the prewar/wartime Imperial Japan years.
The Ice Age generation was still in high school or younger during the bubble.
A weak yen favors the young, a strong yen favors the old.
So all that yen-weakness bashing was just old people talking their own book.
That's really the heart of it, isn't it. That's why the media is desperately pushing for a stronger yen lol.
So what if a weak yen means young people can't afford a trip to Europe? lol
Deflation dragged on for years and the rate gap was huge, so I get why people got talked into variable. Sales reps are smooth operators too.
Guess people figured ultra-low rates would last forever.
Nice, if only 'young people' stayed young forever.
Exactly this. This article seems kind of misleading. Under inflation, it's basically working-age young people who come out ahead — wages rise along with prices, and if you borrowed early, the real value of your repayments shrinks in your favor.
Losing jobs and wages to a strong yen hurts way more than missing out on a trip abroad lol
Whether it's a weak yen or a strong yen, I don't think you small-business types have any way to profit either way.
I'm literally losing wages because of the weak yen. New-grad starting salary is like 300,000 yen, right? But since the yen's worth half what it used to be, that's really just the old 150,000 yen lol lol
This article is literally the one exposing that claim as false lol
What's false about it? Back when the monthly salary was 150,000 yen, people could still afford a Louis Vuitton bag — can you now? lol
Nobody even wants that anymore lol. Young people are out buying the new iPhone instead.
A weak yen means more jobs and higher wages for young people, and it turns out the boomers bashing the weak yen were just bitter about it.
Pretty sure Android is what's actually gaining share lol lol lol lol lol lol
Old people actually invest more money than people in their 20s though lol. The ones making noise about the rate hike are just the poor ones lol lol lol lol
Exactly this. When I bought, fixed was in the 1% range and variable was under 1%, some fraction of a point. Almost everyone went variable, and since the mortgage tax deduction was 1%, variable basically meant a negative interest rate lol — the vibe back then was 'anyone who picks fixed is just a scaredy-cat idiot.' Glad I went fixed anyway. Acting entitled while you're benefiting, then crying 'it hurts, it hurts' and blaming the government the second you bear any risk — that's peak stupidity.
I took out a variable loan 15 years ago, and even at this pace of hikes, I don't think the total will end up exceeding what a fixed loan would've cost. The first 10 years are what really matter, and getting through them at ultra-low rates means I already won the gamble. My financial planner at the time actually predicted this far out and told me fixed made no sense.
'Investment amount,' huh? lol You need to talk in terms of number of investors or the comparison gets skewed lol. The number of people actually investing skews overwhelmingly young, right? lol
Investing is done with spare cash, so of course it skews toward older people lol lol. Though past 70 it's basically 'shukatsu' time (a pun on job-hunting vs. end-of-life prep — same pronunciation), so that's about it for you.
https://mmdlabo.jp/storage/article/2402/Q8TRs7zXnepF2RoQcModS3AbSBYIf69xAXqOgulp.png
That's why I said talk in terms of population. This is just a story about a tiny sliver of boomers who happened to trade stocks. The overwhelming majority of boomers are savers, come on.
Background and Key Points of the Debate
The Bank of Japan lifted its negative interest rate policy in March 2024 and has been raising rates gradually ever since. The three megabanks’ move to raise ordinary deposit rates to 0.5% from November 2nd marks a 500-fold jump from the 0.001% rate of March 2024 — a striking symbol of the shift away from Japan’s long era of ultra-low interest rates. The thread split over whether the simple framing of “rate hikes benefit the elderly while burdening the young” really holds up. The majority of Japanese mortgage holders choose variable rates, so those who borrowed on the assumption that low rates would continue are directly exposed to the increases — but plenty of replies pushed back, arguing that “the risk was already priced in the moment you chose variable” and that “fixed rates were always pricier precisely because they hedge against that risk.” There’s also the question of whether a weak or strong yen actually favors young people more, which resists being framed as a simple generational conflict once you factor in wages and prices rising together. The Yomiuri Shimbun report behind this article estimated the impact on household finances, but it’s worth remembering that the real-world effect varies enormously depending on which type of rate a given household chose and how their savings and borrowing balance out.
※This article is compiled and summarized from the 5ch (Breaking News Plus) thread “[Additional Rate Hike] Negative Impact for Young Mortgage Holders… Elderly Households See a 20,000 Yen Gain.”
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