Japan's Cash-Strapped Monks Turn to Investing Amid Inflation

Koukyo Yoneta, a fifth-generation Buddhist priest in Hokkaido's Japan, is part of a growing trend of temples investing to make ends meet. His temple's donation pool was dwindling due to the country's shrinking Buddhist population and rising funeral costs.

Yoneta's finance-savviness from his previous job at Daiwa Securities Group helped him turn a profit with his portfolio, which included US Treasuries, Japanese real estate investment trusts, and stocks like BYD and Hyundai Motor. His investments returned more than 10 percent annually over two years, covering part of the 25 million yen ($205,000) in repairs needed for his century-old temple.

The extra funds even allowed him to expand the renovations beyond the original plan. Yoneta believes that with funeral business shrinking and temples struggling financially, they will need to build up reserves and invest their funds.

Daian-ji temple in Nara prefecture also holds some assets in cash, but around 10 percent is now allocated to foreign-currency-denominated insurance products, which earn higher interest returns. However, the deputy priest Yusho Kono acknowledges an inherent contradiction in their position: monks should not engage in profit-making activities.

Religious groups, schools, and nonprofit organizations are collectively buying fixed-income products, with NPOs holding around 5 trillion yen of corporate bonds as of March. The Sanae Takaichi administration is facing criticism for focusing on less-pressing issues despite the cost-of-living crunch.