TOKYO: A day after the Tokyo stock market had its biggest fall since 1987, Yuri Sekiya decided it was time to heed Prime Minister Fumio Kishida’s longstanding call for Japanese citizens to invest more of their $15 trillion in household assets. The recent market volatility has emerged as a test case for Kishida’s drive to transform Japan from a nation of savers to one of investors, a shift crucial for the world’s fourth-largest economy as it confronts a rapidly ageing population.

Sekiya, 49, spent Tuesday morning, as stocks were rebounding, at a brokerage seminar learning about NISA accounts - the government’s tax-free program designed to channel dormant cash into shares and mutual funds - in Tokyo’s Shinjuku district. “Maybe now is a good time to start a NISA, because I think the market will go up more stably” after the plunge, said Sekiya, who works part-time in education.

She opened her NISA account earlier this year but had held off investing due to caution. “Japan is becoming a society where we can’t just rely on our pension,” she said, underlining growing awareness among many Japanese that cash is no longer enough to ride out retirement. Everywhere, Japan is showing quiet signs of change after decades spent battling deflation and stop-start growth: prices and wages are going up and the central bank is lifting interest rates for the first time in years. Kishida has made the NISA, which was first launched in 2014, a pillar of his “new capitalism” platform aimed at boosting household wealth after years of decline. The Nikkei benchmark index .

N225 slumped more than 12 percent on Monday followed by a 10 percent surge on Tuesday. Market participants attributed panic selling, including by more sophisticated retail investors who were trading on margin - or using borrowed funds - as a key driver of Monday’s decline. Tokyo exchange data showed a record value of shares bought on margin in July, a risky strategy that can increase returns but also amplify losses in a downturn. SBI Securities, Japan’s largest online brokerage, said its website was flooded with users shortly after the market opened on Tuesday.

Some customers had difficulty accessing the website, a situation that lasted about an hour, a spokesperson said. There were customers who wanted to sell and others wanting to buy on the dip, the spokesperson said. Telephone enquiries had increased by about 50 percent and the brokerage reinforced staffing at call centers. It had not seen evidence of a client exodus when it came to NISA accounts, the spokesperson said. Many Japanese have long avoided investing, seeing it as too risky or akin to gambling.

“There are more people considering investing now, but seeing the current situation might make them hesitate,” said 69-year-old Hiroshi Nabasama, who works in marketing and has had a NISA account for a decade. “Younger people are showing more interest in stocks, unlike our generation,” he said. Kishida wants to see household investment income doubled to ease reliance on the public pension system as Japan ages. Under his administration, the NISA program was overhauled; from this year the annual investment limit was increased to 3.6 million yen ($24,400) and balances up to a certain level made permanently tax exempt.

As a result, Japanese have flocked to NISA, with the number of accounts surging by almost 2 million in the first three months of this year, according to the Japan Securities Dealers Association. As of March there were approximately 23 million NISA accounts with around $267 billion invested through them, according to the FSA bank regulator. Many investors, especially first-timers, favor global or US mutual funds rather than domestic assets. However, not everyone is rushing to invest.

IT worker Yui Takei, 36, who does not have a NISA account, said: “I like the idea of investing in a NISA, but given the recent decline and other issues, I think it’s crucial to study thoroughly before jumping in.” She added that she found the government’s promotion of the program somewhat off-putting. Sekiya said her 20-year-old daughter cautioned that it might not be a good time to invest given the market’s recent volatility, but she disagreed. “I think we just need the right knowledge to invest.” — Reuters