Japanese investors are buying gold to store in Switzerland because of negative interest rates and fears the yen might depreciate as the government grapples with the heaviest public debt burden in the developed world, according to BullionVault Ltd, an online trading and storage company.
The number of buyers jumped 62 percent in the first six months from the second half of last year, said Atsuko Sato Whitehouse, head of Japanese markets at the London-based investment service. She did not provide details.
The Bank of Japan has embarked on unprecedented bond buying to bolster the economy, prompting speculation the yen could plunge if stimulus efforts fail.
“Many of our Japanese customers think it’s too risky to hold gold at home and they want to keep them in Switzerland because they are anxious about the future of Japan,” Whitehouse said in an interview.
The country’s growth has stagnated for a decade, defying fiscal and monetary stimulus which has driven up public debt to more than double the value of annual economic output.
Global investors have piled into gold this year as market turbulence and low or negative interest rates increase the appeal of bullion. Prices soared about 30 percent to the highest in more than two years as assets in exchange-traded funds jumped 37 percent to more than 2,000 tonnes. The stampede increased after the UK voted to leave the EU on June 23.
Bullion is probably in the early stages of its next bull run, according to UBS Group AG.
Rather than weakening, the yen has climbed in the past year because investors see it as a haven along with government bonds, silver and gold.
That has meant the price of the metal in yen has dropped 2.5 percent over that time, even as bullion denominated in US dollars has strengthened 17 percent to US$1,357.54 an ounce.
The surging yen has not stopped some commentators from predicting a collapse.
Yukio Noguchi, a university professor and former Japanese Ministry of Finance official whose business books are best sellers, envisages a scenario in which a failure of the country’s economic stimulus could drive the yen to weaken beyond ¥300 per US$1. That compared with about ¥101 yesterday.
The Japanese investors attracted by BullionVault range from wealthy older businessmen who have experience working abroad and want to shelter their assets, to younger people and women seeking a haven because of increasing global economic and political risks, especially after the British vote to leave the EU, Whitehouse said.
BullionVault sees similarities between the behavior of Japanese investors and their overseas peers, Whitehouse said.
Most of its US customers keep bullion abroad because they fret about the risk of confiscation, which happened during the Great Depression in the 1930s. Half of its British clients store their gold overseas, she said.
The company said on its Web site that it is the largest online investment gold service in the world.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort