A spring downpour last week wasn’t enough to stop Norito Nagahama heading to a central-Tokyo brokerage to study up on Japanese stocks.

“I’m here because I need to learn about investment,” said Nagahama, 39. “You get little out of bank savings.”

The biggest equity slump in the developed world isn’t putting Nagahama off either. When he gets his next bonus, Nagahama is signing up for a Nippon Individual Savings Account as one of 8.65 million people in Japan projected to do so by year-end. The program, which began Jan. 1 and gives tax breaks on share gains, will draw as much as 5.5 trillion yen ($54 billion) into riskier assets this year, according to Nomura Research Institute Ltd.

The Topix index sank 7.6 percent last quarter, buffeted by a stronger yen, concern about an April sales tax increase and waning euphoria about Prime Minister Shinzo Abe’s policy program. With individual investors accounting for less than a quarter of trading on Japanese stocks in March, brokerages say they’re optimistic the NISA accounts will drive a change in attitudes to investment. The gauge fell 1.3 percent to a seven-month low in Tokyo today, capping the biggest weekly slump since June.

Daiwa Securities Group Inc., SBI Securities Co. and Saison Asset Management Co. all reported a surge in NISA accounts in the program’s first quarter. The government is trying to get Japanese households to move some of their 874 trillion yen of cash and bank deposits into stocks to boost retirement savings and provide companies with capital to revive growth. That’s part of Abe’s strategy to beat deflation with a combination of stimulus and structural reform.

David Fuller's view

Some overseas momentum investors have been moving away from Japan following last year’s strong gains.  However, the NISA programme’s tax advantages will attract many Japanese long-term investors back to their stock market.