JPY deposits 22%↑ due to the deepening of the yen… The yen rose slightly from the previous day
As the yen’s price fell to its lowest level in 20 years, commercial banks’ yen-denominated deposits are on the rise.
As of April 28, KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup had a total of 604.4 billion yen (about 5.9 trillion won) in yen deposits. This is an increase of about 22% (107.8 billion yen, about 1 trillion won) compared to the end of last year. More than half of the increase, 57.9 billion yen (about 560 billion won), was newly deposited in March. This is interpreted as the result of an increase in investment in anticipation of an appreciation of the yen along with an increase in deposits by end users such as international students.
An official from a commercial bank said, “As the value of the yen fell below 1,000 won per 100 yen in March, families of Japanese students and trading companies that do a lot of import and export transactions with Japan have been buying and depositing a lot of yen. It is also on the rise recently,” he explained.
As of 1:30 p.m. on May 2nd, the yen-dollar exchange rate stood at 130.32 per dollar. The yen-dollar exchange rate recorded 130.2715 yen on the 28th (local time), breaking the 130 yen per dollar level for the first time in 20 years since April 2002. Last month, a major Wall Street investment bank (IB) predicted that the yen-dollar exchange rate could rise to 135 yen in the near future.
The deepening of the yen is because the Bank of Japan is maintaining a monetary easing policy unlike the monetary policies of major countries. The Bank of Japan announced that it will maintain its short-term policy interest rate at -0.1% and purchase 10-year government bonds at an unlimited rate at 0.25%, the same as before. As for the base rate, the short-term interest rate will be frozen at -0.1%, and the 10-year government bond yield, which is an indicator of long-term interest rates, will be guided to 0%.
Domestic experts point out that a cautious approach is necessary for investment purposes as the yen has already been weakening considerably. Park Hyun-sik, head of the investment strategy unit at Hana Bank, said, “Unlike the US and Korea, the Japanese central bank maintains an accommodative monetary policy, so the yen is weakening.” “This trend is likely to continue. “Unless Japan’s monetary policy stance changes, the yen will not suddenly turn strong, but the pace of weakness is expected to slow significantly from now on,” he said.
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