JIN-336 -- "The Dankai Sedai" to the Rescue?

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T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business, Technology and Cultural News
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Issue No. 336
Thursday September 8, 2005 TOKYO

+++ VIEWPOINT: "The Dankai Sedai" to the Rescue?
1. Retirement payouts of 50 trillion yen 2007-2009
2. Fueling the digital boom

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+++ VIEWPOINT: "The Dankai Sedai" to the Rescue?
1. Retirement payouts of 50 trillion yen 2007-2009

They are called the "dankai sedai" -- those Japanese born in '47, 48'
and '49. "Dankai" means "clod" and here refers to the clustering of
births in these three years. The Ministry of Internal Affairs and
Communications (MIC) gives their numbers as between 2.2 and 2.3
million for each year, for a total of approximately 6.8 million. To put
that figure in perspective, the average population of each age group
14 years and younger is between 1.1 and 1.2 million -- half of the
dankai.

The dankai sedai ("baby boomer generation" doesn't fit; 3 years do
not make a generation) grew up during the years of high economic
growth, and found jobs by the first "oil crisis" (1973) at latest. Their
most productive years were during the rise of Japan as an economic
goliath. Many of them had purchased homes before the bubble years.

Now the dankai are seen as saviors by many companies that have long
suffered from sluggish consumer spending. The reason: the large
retirement allowance the dankai sedai will receive.

Takuma Hashimoto, of the Dai-ichi Life Research Institute Inc.,
estimated, on the basis of long-term forecasts of the population of
60-year-olds and GDP, that from 2007 through 2009 (the years the
dankai turn 60) retirement lump sum grants will total 50 trillion yen.
This gargantuan sum results not from an increase in the the size of
the grants but from the above-average number of recipients over the
three-year period.

The dankai are doubly endowed because with the increase in life
expectancy, they will in the decade following retirement receive
inheritances from parents passing away in their mid-70s and beyond.

The Dai-ichi Life Research Institute Inc. made another trial calculation
based on Internal Revenue Service data. Total paper assets (savings
and the like) are estimated at a minimum of 10 trillion yen. Dankai
retirees are already having an impact on consumption. The reason is
many are retiring and receiving their allowances in their 50s.

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2. Fueling the digital boom

According to the Mizuho Research Institute, the dankai are fueling
the boom in digital consumer goods. An MIC family income and
expenditure survey of 9,000 households revealed that households
headed by men or women 50 years old or older spent much more
money on televisions than other households over the past several
years.

Households headed by older people spent on average slightly less than
110,000 yen on televisions in 2004. The majority were large flat-screen
TVs. Mizuho Research Institute believes the increase in large outlays
for televisions is due to the increase in households making purchases
in anticipation of the imminent receipt of retirement allowances.
The institute speculates that the dankai, who cut their teeth on
subcultures like the Beatles, will give birth to a vibrant senior culture.

Dai-ichi's Hashimoto does not think consumption will increase on a great
scale with the retirement of the dankai, citing such reasons as anxiety
about public pension funds. Perhaps. However, the well-endowed dankai
will without doubt qualitatively change consumption.

(Next week JIN looks at some dankai-oriented products.)

--Burritt Sabin

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EDITOR
Written and edited by Burritt Sabin (editors2@japaninc.com)

(C) Copyright 2005 Japan Inc Communications KK. All Rights Reserved.

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