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.
TRADE WAR: Tariffs should also apply to any goods that pass through the new Beijing-funded port in Chancay, Peru, an adviser to US president-elect Donald Trump said A veteran adviser to US president-elect Donald Trump is proposing that the 60 percent tariffs that Trump vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru. The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60km north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the western hemisphere on the White House National Security Council in his first administration. “Any product going
High above the sparkling surface of the Athens coastline, the cranes for building the 50-floor luxury tower centerpiece of Greece’s future “smart city” look out over the Saronic Gulf. At their feet, construction machinery stirs up dust. Its backers say the 8 billion euro (US$8.43 billion) project financed by private funds is a symbol of Greece’s renaissance after the years of financial stagnation that saw investors flee the country. However, critics see it more as a future “ghetto for the rich.” It is hard to imagine that 10km from the Acropolis, a new city “three times the size of Monaco”
STRUGGLING BUSINESS: South Korea’s biggest company and semiconductor manufacturer’s buyback fuels concerns that it could be missing out on the AI boom Samsung Electronics Co plans to buy back about 10 trillion won (US$7.2 billion) of its own stock over the next year, putting in motion one of the larger shareholder return programs in its history. South Korea’s biggest company would repurchase the stock in stages over the coming 12 months, it said in a regulatory filing on Friday. As a first step, it would buy back about 3 trillion won of paper starting today up until February next year, all of which it would cancel. The board would deliberate on how best to effect the remaining 7 trillion won of buybacks. The move
In a red box factory that stands out among the drab hills of the West Bank, Chat Cola’s employees race to quench Palestinians’ thirst for local products since the Gaza war erupted last year. With packaging reminiscent of Coca-Cola’s iconic red and white aluminum cans, Chat Cola has tapped into Palestinians’ desire to shun brands perceived as too supportive of Israel. “The demand for [Chat Cola] increased since the war began because of the boycott,” owner Fahed Arar said at the factory in the occupied West Bank town of Salfit. Julien, a restaurateur in the city of Ramallah further south,
RSS