The socioeconomic impact of COVID-19 has led to an unprecedented level of "excess savings" in Japan in FY2020, as households have significantly reduced particular types of spending on services and luxury goods, while government transfers, such as the fixed-amount cash handout, have increased in an unprecedented manner. Most of the excess savings is held in the form of highly liquid assets such as bank deposits, and there has been little increase in investment in risky assets such as stocks. The analysis, based on our survey, shows that the reduction in savings due to negative income shocks is concentrated to a small group of households, and that individuals who have experienced large income decreases have also experienced large decreases in their asset holdings. On the other hand, individuals whose income change was limited to a small fraction of their income were more influenced by the surrounding environment other than themselves, such as the change of family income, while for individuals whose income increased significantly, the most important determinant of how much they save was the individual's intention to save actively.
