The first contribution of this paper, in following the works of Lettau and Ludvigson (2001a,b), is to construct a Japanese consumption–wealth ratio data series and to examine whether it explains Japanese stock market data. We find that the consumption–wealth ratio does predict future stock...

I provide a detailed description and in-depth analysis of household portfolios in Japan. (1) It is shown that the share of equities in financial wealth and the stock market participation of Japanese households decreased throughout the 1990s. (2) Using survey data, age-related variations in the...