Japan's tax-free investment program passed 30 million accounts this year, and the next expansion is less than two months away. The Financial Services Agency counted 30.48 million NISA accounts at the end of June 2026, up 8.1% from 28.21 million at the end of December, and savers bought 13.8 trillion yen of stocks and funds through the accounts in the first six months of the year.

The flows matter well beyond Japan. NISA money is one of the steadiest sources of retail demand for global index funds and Japanese equities, and a children's version scheduled for January 2027 will open the program to every age group. Investors in Hong Kong and Singapore who track Japanese stocks, or the global funds that Japanese savers favor, are watching a pipeline of monthly contributions that does not depend on market mood.

What the FSA Data Show

The FSA survey, published Oct. 2 and covering more than 700 financial institutions, shows cumulative NISA purchases reached 85 trillion yen by the end of June. That is already well past the government's goal of 56 trillion yen by the end of 2027. The account target is further off: the government wants 34 million by the end of 2027, about 3.5 million more than the June count.

Of the 13.8 trillion yen bought in the first half, 10.16 trillion yen went through the growth investment allowance, which can hold individual shares, and 3.66 trillion yen through the smaller accumulation (tsumitate) allowance. Investment trusts took 61.9% of all purchases and listed stocks 34.5%. ETFs were 3.3%, and REITs a fraction of 1%.

The accumulation side is overwhelmingly passive. Designated index funds made up 88.1% of tsumitate buying in the period, against 4.9% for actively managed funds, the agency's tables show.

Buying power still sits with middle-aged and older savers. People in their 50s accounted for 23% of first-half purchases and those in their 40s for 20.5%. Savers aged 60 and older bought about a third of the total, mostly through the growth allowance.

The fastest account growth came at the young end. Accounts held by people in their teens, who can open an adult NISA from 18, rose to 490,730 from 134,413 six months earlier, an increase of about 265%. Accounts in the 20s age group rose 11.8% to 3.77 million. Those young savers put in little money so far: teens made up 0.3% of purchases.

How Children's NISA Will Work

The children's NISA, known as kodomo NISA, came out of the fiscal 2026 tax reform outline that the cabinet approved on Dec. 26, 2025, according to Impress Watch. Brokers describe it as scheduled to start in January 2027. Its main terms:

• Open to minors aged 0 to 17, with age judged as of Jan. 1 of each year, according to Monex Securities.
• Annual contributions of up to 600,000 yen and a lifetime tax-free holding limit of 6 million yen.
• Only the funds eligible for the adult tsumitate allowance, meaning certain long-term, diversified investment trusts.
• Holdings move automatically into an adult NISA at 18 and count against the adult lifetime limit of 18 million yen.

Withdrawals are the main restriction. From age 12, a parent or guardian can take money out only with the child's agreement. Monex says the request must come with documents showing that the money is for the child and that the child consented.

Brokers are already taking sign-ups. Monex began accepting advance applications on Oct. 1, 2026. It requires the parent to hold a securities account and the child to have a separate minor's account, which, as of October, had to be opened by mail.

Other Changes Planned for 2027

The same outline widens what adult NISA accounts can buy, Impress Watch reported. Funds tracking the Yomiuri Stock Index and the JPX Prime 150 index are to be added as eligible tsumitate investments, and bond-focused investment trusts will be allowed in. The no-sales-fee rule for the accumulation allowance is to be relaxed only for regular sale services, where providers sell holdings for investors on a schedule.

The adult limits stay as they are: 1.2 million yen a year in the tsumitate allowance, 2.4 million yen in the growth allowance and 18 million yen over a lifetime.

For readers outside Japan, the practical point is the direction of flows. More than 60% of NISA buying goes into funds, and index trackers dominate the tsumitate allowance that children's accounts will mirror, so new contributions from parents setting up children's accounts are likely to follow the same routes. Similar habits are spreading through the region: Korean retail investors poured a record 5 trillion won into one S&P 500 ETF. Japan's own central bank is moving the other way: the Bank of Japan will more than double the pace of its ETF sales.

The first test for kodomo NISA, and for the BOJ's faster selling, comes in January, when both the new allowance and the 2027 sales pace begin.

This article is general information, not financial advice.