Japan regulator tells financial firms to reassure nervous new investors

(Corrects month in dateline)
By Miho Uranaka and Anton Bridge
Tokyo : The new head of Japan’s banking regulator called on financial firms to reassure and educate inexperienced retail investors, citing the need to dispel their anxiety after wild gyrations in markets this week.
The comments from Financial Services Agency Comissioner Hideki Ito come as the government has been on a push to channel more of the country’s $15 trillion in household assets into investments.
Under Prime Minister Fumio Kishida, Japan overhauled its tax-free NISA accounts from this year, raising caps on annual investment amounts and making balances permanently tax exempt up to a certain level.
The result has been a surge in the new NISA accounts since the start of this year.
Monday’s 12.4 per cent sell-off – the second-largest drop in Tokyo market history – appeared to spark concern among retail investors with some brokerages reporting a flood of calls on Tuesday morning when the market re-opened.
It also marked the first major market turmoil since the NISA programme had been overhauled. As of March there were approximately 23 million NISA accounts with around $267 billion invested through them.
Financial institutions that work directly with investors should respond carefully, Ito said, “especially with clients who have just started a NISA account and are anxious,” he told Reuters in an interview on Monday that was embargoed until Wednesday.
Ito said firms should educate investors on the benefits of long-term, diversified investment, using historical data.
Ito, who assumed his position in July, said the regulator was also pushing more broadly to bolster financial and market literacy in Japan.
Kishida wants to see household investment income doubled to ease reliance on the public pension system as Japan ages.