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Business Insider

At 36, Makoto Isechi finally feels like he can start living life.
The freelance software engineer and his wife, an aspiring chef, are several months away from being debt free.
A high-school graduate who grew up in Kagoshima, on Japan’s southern coast, Isechi started his career selling musical instruments at a retail store, then played guitar in a small band before founding an IT company with a fellow musician.
When the firm went bankrupt in 2019, he found himself saddled with US$35,000 in debt, while his wife took out loans to pay for culinary school.

Isechi closed his company and decided to be a freelance website designer, teaching himself how to code and use Photoshop by watching YouTube videos and taking online courses. Over the past three years, he’s slowly built a client base and now earns US$7,500 a month.
“Now we can start our future,” Isechi said.
That future doesn’t entail much change for the couple. His wife is thinking of moving from their three-room flat in Osaka to open an Italian restaurant in the countryside, but they have no plans to have children, own a home, or get rich.
Like many Japanese millennials, Isechi is content with living life as it is, happy to stay afloat as they have watched their nation endure crippling economic crises and natural disasters.
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The Pew Research Centre think tank in the US defines millennials as those born between 1981 to 1996, so they are between the ages of 24 to 44 now. This means that while American millennials might have started their careers during the global financial crisis of 2008-09, their Japanese peers have spent their entire lives in an economic slump.
Roughly 27 million people – or about one-fifth of the country’s total population – in Japan are millennials. In comparison, the United States is home to 72 million millennials, while China has around 400 million millennials.
Three millennials in Japan, as well as two economists, were interviewed for this article. The findings about their career aspirations, their spending habits, and their financial decision-making speak to the typical millennial in Japan, but not every member of that generation.
The typical Japanese millennial is financially conservative, having grown up watching their country’s “Lost Decade” suffer from a devastating economic crisis.
My mother would often tell us, ‘Never take a loan for anything at all’
Makoto Isechi on growing up during Japan’s ‘Lost Decade’
Growing up in the early 1990s in the southern Japanese city of Kagoshima, Isechi and his younger brother watched their parents struggle with mortgage and car payments amid Japan’s worst economic crisis of modern times.
“My mother would often tell us, ‘Never take a loan for anything at all,’” Isechi said.
Isechi might not have heeded his mother’s advice, but he said the financial pains of his childhood continue to govern his mindset today.
“The millennial generation in Japan started life in a downturn when the bubble popped and many of their parents were impacted. So the millennials were, just as much or if not more, affected, in many ways,” said Seijiro Takeshita, dean at the University of Shizuoka’s graduate school of management, informatics, and innovation.
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From 1986 to 1991, Japan experienced an economic bubble during which assets and property prices were vastly inflated.
Then Japan’s asset bubble burst in the early 1990s. The situation was so bad that Japan’s benchmark Nikkei 225 index slumped 40 per cent a year after the index hit a high of nearly 39,000 in December 1989 – and it still hasn’t recovered after 30 years.
Japan’s economy grew an average of around 4 per cent in the 1980s – but that dropped to around 1 per cent to 3 per cent for most years since the 1990s.
In particular, the 10 years starting with 1991 are known as Japan’s “Lost Decade”, as the country’s unemployment rate more than doubled from 2.1 per cent in 1991 to a historic high of 5.4 per cent in 2002.

“Japan’s economy fell into stagnation which has lasted three decades, so the millennial generation has never experienced very good economic situations,” said Takahide Kiuchi, an executive economist at Nomura Research Institute.
“These conditions made them more cautious in terms of spending and conservative in terms of working style.”
It didn’t stop at the Lost Decade. Japanese millennials spent their entire lifetimes witnessing disaster after disaster – including the Asian financial crisis of 1997 and the earthquake and tsunami of 2011.
The successive disasters and the economic havoc the events wrought shaped Japanese millennials and their world view, making them “more realistic than the generation before them”, which revelled in the excess of the country’s economic boom, Takeshita said.
They are not like the generation before who are like, ‘go, go, go, work hard’, work till death – because they’ve seen so much negativity
Seijiro Takeshita, University of Shizuoka
But there’s an upside, too.
“They are not like the generation before who are like, ‘go, go, go, work hard’, work till death – because they’ve seen so much negativity, be it in international affairs or natural disasters,” Takeshita added, referring to the concept of karoshi, or death by overwork. “They didn’t start out with a bubble, so that is quite a big deal. They are sober.”
Most of Japan’s millennials don’t care about buying a home, and less than one-third of them own property.
Japan’s home ownership rate has held steady at around 60 per cent since the 1970s, according to Statista. But younger generations are accounting for a shrinking percentage of homeowners. In 2018, 26 per cent of homes were owned by heads of households in the 30 to 34 age bracket – down from 46 per cent in 1983. The home ownership rate for heads of households in the 35 to 39 age group fell from 60 per cent to 44 per cent in the same period.

“I can’t ever imagine buying a home for ourselves,” Isechi said. He’s never felt as though the national economy was stable enough for him to safely purchase a house, and he believes he lacks the financial literacy to choose a good property.
Unlike their parents and peers in South Korea, many Japanese millennials do not aspire to own homes.
“These generations have gone through the reality of seeing asset prices just dropped to rock bottom, and the position of owning a home isn’t as important as the previous generations,” said Takeshita from the University of Shizuoka.
Despite this, Jin Gujin, a 37-year-old mechanical engineer in Kyoto, has seized upon a niche in Japan’s rental market. He took out a US$430,000 loan last year to buy two properties that he renovated into sharehouses, where tenants rent a room and split kitchen and bathroom facilities.
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Jin can take 12 tenants in total and charges each of them US$470 a month, bringing in a rental income of over US$5,600 a month.
With his monthly loan and interest payments tallying US$1,000, the houses are already paying for themselves, though it would take him around seven years to repay his debt at that rate.
He lives in one of his two properties and says if it weren’t for his rental business, he’d be content renting a room in someone else’s sharehouse. “I think Japanese people are happy to rent until their deaths,” he said.
As digital natives, Japanese millennials tend to have more diversified values than the generations before them and don’t view owning a property as such a huge deal.

“I guess because of the digital age, they are able to see things in a wider and more flexible perspective,” Takeshita added.
Japanese millennials may not be working themselves to death, but they’re still clocking long hours at work.
On a typical workday, Jin clocks 12 hours at his office, where he has been designing smartphones, cameras, and tablets for the past 13 years.
When he gets home at 10pm, he spends the night playing video games or reading manga novels. He sleeps about four hours a night.
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“Since I spend a lot of extra time in my office, I need time for my hobbies and personal relationships,” Jin said. “Usually I will go to bed at 3 or 4 in the morning, then wake up at 7:30 for work.”
“In my company, it’s normal to do 20 hours of overtime in a week.”
Isechi echoes this sentiment. Though he now works seven days a week as a freelancer, he said he often felt pressured to stay late at his former retail job and help his senior colleague – whom he calls senpai.
But things are changing – Takeshita believes millennial employees are beginning to reject the culture of working overtime because Japanese companies aren’t drawing that kind of business any more.
The government is asking us, please make children. But most people don’t have the money to take care of them. It’s too scary to have children
Suganuma Natsuki, 33-year-old Tokyo resident
“In my opinion, this has more to do with how the companies themselves are basically becoming a lot more relaxed in their time because they cannot go for growth as they used to, as our growth potential rate has gone down quite significantly,” he said.
Indeed, people in Japan have been working shorter hours even leading up to the pandemic, according to data from the Organisation for Economic Co-operation and Development, or OECD, an intergovernmental organisation.
An average worker in Japan worked 1,644 hours in 2019 – down 5 per cent from 1,733 hours in 2010, per the OECD. In comparison, people in the US and South Korea worked an average of 1,824 hours and 1,967 hours, respectively, in 2019.
With Japan’s millennials perpetually worried about the economy, few of them are thinking of starting families.
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Suganuma Natsuki, a 33-year-old Tokyo resident, quit her job in 2021 to start her own microbiology research firm. Some of her peers have a child or two, but she and her husband believe it would be too difficult to start a family while running Suganuma’s company.
“The government is asking us, please make children. But most people don’t have the money to take care of them. It’s too scary to have children,” she said.
All three millennials interviewed for this article are in relationships or marriages but said they’d never consider having children.
The number of births in Japan fell to 1.26 per woman in 2023 – the lowest in 17 years, according to the country’s health ministry. In comparison, the US birth rate is 1.7, according to the World Bank, while South Korea reported the world’s lowest fertility rate of 0.78 children per woman in 2022.
Younger generations think they have no prospects of an income increase in the future … so getting married and having children are taking a back seat
Takahide Kiuchi, executive economist
Japan’s declining birth rate isn’t a new trend. The country’s birth rate hit 4.54 in 1947 in the years following World War II but started dropping sharply around 1960, before levelling off at around the two mark up until the 1970s, when the country’s economy was booming, according to the Japanese government on its website. The number continued sliding after the 1970s.
The country has tried to boost childbearing rates by creating conducive environments for women to have children and be able to get back to work without childcare demands.
But millennials in the country aren’t having children because the conservative nation is not confident about the future.
The sense of insecurity is compounded by economic gloom as real wages have not risen since the 2000s – although some companies have increased salaries recently due to inflation. Nomura’s Kiuchi thinks this is a one-off pay increment.


“Younger generations think they have no prospects of an income increase in the future,” Kiuchi said. “They are living under limited income and still wanting to enjoy life, so getting married and having children are taking a back seat.”
Isechi said he and his wife are partially against having children because they enjoy moving to various parts of Japan every few years and think they’ll have to settle down if they start a family.
“Having children is a huge change in our lives and being a good parent is hard. I don’t know when we can be ready to make a decision like that,” he said.
Used to seeing adversity hitting the economy, Japanese millennials are consistently conservative spenders.
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Growing up in an environment of restraint after Japan’s asset bubble popped has made the country’s millennials far more frugal than the free-spending generation that preceded them.
“They’re not like big spenders like the previous generation who lived through the bubble. They’re more realistic, and their spending patterns are much more secure and solid,” Takeshita said.
Suganama saves about 15 per cent of her US$5,700 monthly salary while paying off a US$60,000 student loan. Most of her leisure expenses go toward backpacking trips across Europe and Asia, and she’s visited 35 countries in total.
Meanwhile, Jin – whose annual salary last year was US$78,000 – says he saves 70 per cent of his income after taxes, which he puts into the stock market and bitcoin. He limits big expenditures to short road trips around Japan but plans to spend US$2,000 on a trip to the West Coast of the US soon.

Between rent, taxes, and paying off his loans, Isechi said he and his wife have almost no savings.
“We try, but we fail to save,” he said. “It is a big problem for us now.”
Unlike their parents, Japanese millennials don’t stand for the hustle of corporate life. Suganuma has just started her own company and says starting a family would be too taxing for her and her husband.
Before starting her firm, Suganuma spent seven years working at a local food giant researching the health effects of yogurt products. The hours were hard to keep up with – her team would regularly have to work weekends to check on their research.
I want to do something new. I want to create my own company, but I don’t have any good ideas
Jin Gujin, 37-year-old mechanical engineer in Kyoto
Suganuma was also never promoted – but she said she preferred that arrangement.
“I think young people don’t want to be promoted. The big company CEOs don’t look like they enjoy their work every day, they look like they work so hard,” Suganuma said.
By 2021, she’d grown jaded with corporate life. She quit her job and started her own firm that examines how gut health affects pregnancies and general fitness.
“I have a dream to make people healthy and happy,” she said. “It was difficult at my old company because they wanted to make a lot of food to sell for cheap.”
Jin, the mechanical engineer, has also never been promoted despite working at the same company for 13 years.
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“In Japanese companies, people work very hard, but they won’t get a higher position,” Jin said. He’s resigned to that arrangement and says he looks elsewhere for fulfilment.
Jin dreams of attaining a language-teaching licence and moving overseas – perhaps to Thailand – as a Japanese tutor. “I want to do something new. I want to create my own company, but I don’t have any good ideas,” he said.
With no property or children, Isechi said he doesn’t think he’s better off than the generation before him, the one that grappled with the 1990s financial crisis.
“I think I’m also going through the same pains as my parents,” he said. “But I enjoy it! It’s my life!”
This article was first published by Business Insider


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About one-fifth of Japan’s population are millennials. They’ve spent their entire lives in an economic slump and are mostly just happy to stay afloat
Successive disasters and the havoc wrought shaped their world view, making them ‘more realistic’ than the free-spending generation that came before


About one-fifth of Japan’s population are millennials. They’ve spent their entire lives in an economic slump and are mostly just happy to stay afloat – with no plans to have children, own a home, or get rich.


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