Frugal Asia to dodge much of credit card beating

By David Dolan - Analysis

TOKYO (Reuters) - Even after 14 years in the white-knuckle world of stock trading, Ken Masuda doesn't sound like a big risk-taker -- at least when he talks about his own cash.

"I'm more conservative than most Americans when it comes to money," said the 37-year-old Masuda, a Japanese trader who has spent most of his career betting on stocks for a Tokyo brokerage.

"Americans will take a loan to buy a house, and then take another loan to buy another house. That would be unthinkable in Japan. Japan is still a culture of savers."

That frugal culture may be a saving grace for Japan and much of the rest of Asia as the global financial crisis and a worsening economy make it tougher for consumers to repay mounting debt, further straining banking systems and adding to fears of a deep and long worldwide recession.

As more credit card debt, auto loans and other consumer loans sour in the United States and Europe, analysts and bankers believe Asia is unlikely to feel the same squeeze, helped by conservative borrowing and a better outlook for labor markets.

"I don't think it's really the next shoe to drop for Asia," said Jason Rogers, credit analyst at Barclays Capital in Singapore. "I don't think there's the same credit card culture that exists in the U.S. in Asia."

Last month, the head of head of Bank of America Corp (BAC.N) warned that the U.S. credit card industry could see record losses as overstretched borrowers find it tougher to repay years of easy credit.

U.S. credit card companies may need to reduce credit limits by more than $2 trillion in the next 18 months, further denting fragile consumer confidence, reckons Meredith Whitney, an analyst at Oppenheimer & Co.

Bank of America, Citigroup Inc (C.N) and JPMorgan Chase & Co (JPM.N) represent more than half of the estimated outstanding U.S. credit cards, and all three firms have considered reducing card exposure, or putting a damper on growth, Whitney said in a recent research note.

U.S. households have accumulated an additional $8 trillion in debt since 1998, bringing the total to $14 trillion, U.S. Federal Reserve figures show.

Japan's economy is roughly one-third the size of the U.S. economy but government data shows its outstanding consumer debt is about $191 billion, a little more than 1 percent of U.S. household debt.

NO HORSES, STOCKS, OR DICE

For Japan, which boasts an estimated $16 trillion in household savings, the push to save may be borne from a tradition of avoiding risk.

Veteran stock traders remember a time when their occupation was looked down on as unsavory and schoolchildren were warned to shun the vices of horse-racing, crap-shooting and stock markets.

Although attitudes have changed, an aversion to risk has not.