In the 1980s, Japan “was a hit”. After decades of strong economic growth, their companies were competitive and the West was beginning to be flooded with Japanese products, Honda, Nissan, Toyota and Suzuki cars were becoming more common and popular (at first in the US they were considered a joke because of their low cost and size) and electronic products from Toshiba, Panasonic, NEC, JVC, Sega, Nintendo or Sony were considered excellent. It is not surprising that films of the time (bladerunner either Die Hard) will show a world commercially dominated by Japan. But these years did not last forever.
Everyone wanted to invest in Japanwhich was suffering from a stock and real estate bubble (it was said that the space occupied by the Imperial Palace in Tokyo was worth more than the entire state of California. The Nikkei went from 10,000 to 40,000 points in just four years. But it explodes the bubble. Then it happens that the Japanese Central Bank begins to lower interest rates. Something that begins to drive Japanese housewives crazy, to know why, you have to understand the cultural context of Japanese families.
The ladies of the house control household finances
Japanese families save a lot, in part this is one of the reasons why Japan’s public debt is so high and holding up so well. In addition, in many Japanese families, women and housewives are the ones who manage the family finances. They expect the husband to give them his full salary and give him an allowance for his expenses. They are responsible for the strong savings made by Japanese families. It also has strong decision-making power over much of the more than twelve billion dollars that Japanese families have saved and are risk averse.
ok all of a sudden housewives find that with low interest rates they cannot find a return on their savings. This is where the phenomenon of the Watanabe ladies arises. Watanabe (渡辺) is one of the most common surnames in Japan, not an adjective. It is believed that the origin of the cliche comes from the 1986 film Gung Ho starring Michael Keaton and Geddee Watanabe. The term refers to these ladies who in the period of the lost decade (1990-2010) begin to look for options for their savings. Among these are the Forex markets.
This phenomenon arises from the year 2000, I suppose because it is the moment in which high-speed internet becomes common in houses all over the world. These ladies had to overcome the taboo in Japanese society that making money by speculating is frowned upon. Sometimes the Watanabe Ladies earned more money in a few hours at home than her husband working all day outside of it. Sometimes not even their husbands know that they spend time on this type of activity.
The Watanabe ladies are quite well known as people (retail investors) who are dedicated to making operations in the foreign exchange market, very typically CarryTrade. What would Carry Trade be? Well, typically borrow in a low-interest currency and invest in other currencies with higher interest rates. For example sell your yen and exchange it for Australian dollars or Brazilian real. In addition, Japan operates a lot in the foreign exchange market. In 2022 there were some 800,000 open FX accounts, 85% of them by men in the decades of the 30s, 40s and 50s (although some younger people became interested).
A Watanabe Lady: Mayumi Torii
Mayumi Torii she is possibly the most well-known Mrs. Watanabe. she has tolooked like several times on Japanese TV, especially since he wrote his book and founded his FX Beauties Club with over 40 members. Between 2006 and 2007 she declared to have earned more than 150,000 dollars, her motivation? To be financially independent from her husband, since she had problems when her first husband divorced her and her son and she had to live on her meager savings. Despite remarrying, she didn’t want to feel vulnerable again.
The term Mrs. Watanabe does not refer exclusively to Mayumi Torii, of course, but also to the many retail traders who trade the forex market, especially Japanese housewives. The aggregation of many individual citizens operating can be quite significant, at the time according to Kazuhiro Shirakura, an analyst at the Tokyo Yano Research Institute, moved 9.1 billion dollars a day, they were a fifth of the market during Tokyo market trading hours. In 2022 it was estimated that they had approximately one sixth of the shares of listed Japanese companies.
Despite the strong setback they received in 2007, Japanese housewives have not stopped trading in the foreign exchange market. A cliché that transcended to fiction. For example at the time there has been talk that they could be behind speculative moves behind Bitcoin. 40% of cryptocurrency trades in October 2022 were executed with Japanese yen.
Today Japanese housewives are still trading in the foreign exchange market, trying to get higher returns on their savings as a way to supplement family income. However, the lack of news makes it quite difficult to know the profile of the Watanabe ladies and if it has changed over the years beyond the phenomenon of the early 2000s.
Ask the readers of El Blog Salmón, were you aware of the phenomenon of the Watanabe ladies? Do you know any similar profile that surprisingly operates in the financial markets frequently?