TOKYO — Michiyo Taki can tell you exactly when she lost faith in the economic miracle called Japan.
Last November the venerable financial firm Yamaichi Securities Co. went bankrupt. The news gripped Japan, dominating talk-show discussions and anxious newspaper editorials for weeks.
For Ms. Taki, like many Japanese, the bankruptcy brought home the economy's troubles in a way no headline or economic indicator had done before.
"My reaction was, 'No way!' " she says, miming her shock when she heard the news. "Big companies never go bankrupt!" She pauses. "Nothing is guaranteed anymore."
Yamaichi's failure changed the way Taki thinks about the future and the way she watches the bottom line.
In Tokyo, and among United States and Asian leaders, there's a consensus that one solution to Japan's economic impasse lies in getting its citizens to spend. But as Japan's economy is evolving, so too are its consumers. People like Taki feel a wariness about the future that will shape Japan's economy and affect all its partners. Consumers are becoming more discerning about how they use their money, more critical of government economic policy, and perhaps more ready for change than their leaders.
"Consumers are restructuring too," says Mariko Fujiwara, director of research at Hakuhodo Institute of Life & Living. "They are more particular than the old generation."
People here still spend, Taki says, but not nearly as much as they used to. And when they go shopping, they're spending their money far more carefully.
Insecurity changes habits
Magazines run features on "How to look better in cheaper clothes." Manufacturers like cosmetics giant Shiseido adjust product lines to meet demand for high quality at more reasonable prices.
"The bad economy has changed spending habits," says Mihoko Yamada, a magazine columnist who writes on trends. "[People] definitely want to spend less."
But people aren't just bargain-hunting. "I don't feel protected by the government," says Yoko Matsumura, a Tokyo para-legal. "I save a lot because of this. I always feel at risk."
Taki has gotten good at finding the best deals in her bustling town, halfway between Tokyo and the port city of Yokohama, and bargains have become part of the monthly budget arithmetic. "How much do you pay for toothpaste in the US?" she asks, comparing the price to the $3 deal she's found.
Like many Japanese wives, she manages the household finances - her husband Masakazu's salary and her earnings as a part-time secretary. She used to go out and buy whatever she and Masakazu needed at the first place she found it. Now she drives around checking prices before deciding what to get where, a routine she applies to necessities and the small luxuries they indulge in.
They're going to use Masa-kazu's annual bonus to get new suits for work, and are busy looking for the best deal. Previously, they simply would have bought the suits they liked best.
Bargain hunting has become a small source of pride. At her home, she points out a window box full of heavy-headed pansies normally sold for $18. She found them for $10.
Taki doesn't look like a threat to government reform efforts. Slim and athletic, she wears her long hair loose and uses little makeup. She's also a far cry from the fabled Japanese consumer of the booming 1980s, when people flush from the booming stock market sprinkled gold leaf on their sushi.
The Takis' apartment, spare and neat, exhibits none of that excess. The dining-room wall is lined with an upright piano, lush houseplants, and an armoire full of china. A tissue box on the table is nestled inside a lacy white cover - a feminine touch that reflects the many hours Taki spends here without Masakazu, who sometimes returns from his bank job as late as 11 p.m.
Hard work and uncertainty
While Masakazu eats a late dinner, he'll share gossip he's heard that day - about another bank that's in trouble or a company rumored to be on the verge of collapse.
"We don't even know what's going to happen to my husband's bank," Taki says. "It scares me."
For some, the economic change is a necessary transition.
"Now Japan's economy is one of peaks and valleys, and if you don't work hard you won't get ahead," says economist Haruo Shimada. "That's a healthy Japan, I think."
Despite her worries, Taki wants change. "We need reform," she says. Overseas vacations have opened her eyes to the welter of Japanese restrictions that keep prices here among the highest in the world. More-open markets would mean cheaper groceries, she says, something she's seen for herself on trips to Britain and Spain.
"Coffee was so much cheaper in Spain," she remembers. "And fresh orange juice only cost [$1 or $2]. It's [$8] here! That was a surprise."