>Thursday, 7 February, 2002, 10:38 GMT
>Japanese go for gold
>
>
>By the BBC's Charles Scanlon in Tokyo
>Fears are growing again about the health of the Japanese financial system.
>
>On 1 April the government begins to phase out its guarantee to reimburse
all deposits in the event of bank failures - a decision which is adding to
an already nervous mood.
>
>Stocks and property have proved disastrous investments over the last
decade, and the continuing recession leaves little prospect of an upturn.
>
>That is why private investors are seeking out other options - such as gold
bars.
>
>'Dangerous state'
>
>You do not see many smiles in Tokyo's financial district these days, but in
gold shops the staff can hardly contain their glee.
>
>Sales of gold bars are up five-fold on this time last year, says the shop
manager of the Tokuriki Honten gold shop, Masahiro Arai.
>
>"In Japan trade in gold is usually done with cash - people come in here
with paper bags full of money and then they take the gold and go home, often
by train or taxi. They're buying in large quantities, up to 30m yen at a
time," he says.
>
>That is more than $200,000. Understandably there is a rather furtive
atmosphere in the shop.
>
>Many of the customers are shabbily dressed - deliberately - so they do not
attract attention on the street.
>
>An elderly woman who produced $25,000 in cash said she was very worried
about the economy.
>
>"I'm buying Euros and dollars as well as gold. something disastrous could
happen to the economy. I'm very anxious about the yen it's getting weaker -
that's why I'm buying gold for the family."
>
>Worried wives
>
>Makoto Miki, the manager of another gold shop also reports a big increase
in demand and he says the type of customer is changing.
>
>"Several months ago, usually one old or middle aged man came in and bought
gold, but recently the number of people who are accompanied by their wives
is increasing."
>
>Mr Miki thinks the wives are coming in because they"have power to decide
or control the money at home".
>
>"I think the wives are also worrying about the safety of their money," he
says.
>
>Concerns about the health of the Japanese economy are coming to a head.
>
>Jitters
>
>The stock market is plunging to new depths and that puts intolerable
pressure on the banks, which rely on huge stock portfolios. They are already
groaning under the weight of loans that will never be repaid.
>
>On top of all that, the government begins to phase out its guarantee to
reimburse all bank deposits at the end of March.
>
>Kana Norimoto, banking analyst at Nikko Salomon Smith Barney, says the
timing could hardly be worse.
>
>"I actually don't agree with them taking the deposit cap off at this point.
I think that the government needs every policy it has in place right now to
cope with a growing crisis.
>
>"You're seeing a lot of people who are jittery and I think that that in
itself could push the current situation over the edge."
>
>Good option?
>
>Out on the streets - the mood is increasingly jittery.
>
>Many Japanese lost huge sums on the stock market when the bubble burst 10
years ago - it is still more than 70% below its peak.
>
>Now people are questioning the banks.
>
>"Even banks go bankrupt nowadays - it's a different era. We're responsible
for protecting our own savings. It can't be helped," says one man.
>
>Another adds:"The banks are so unstable and I'm very confused about how to
keep my savings. We don't know which ones are reliable."
>
>Some are seeking refuge in the state owned post office.
>
>There are predictions that in the end the government will have to
nationalise the entire banking system and sort out the bank loan problem
with public funds.
>
>So is gold a good option?
>
>Maybe from a retail depositor's standpoint it seems to be a very safe
investment.
>
>Obviously there is something very tactile about gold, you can probably
stick gold bars under your mattress, but it renders monetary policy
ineffective for the government.
>
>The Japanese Government and the economists may not like it - but the yellow
stuff is likely to remain in demand for the foreseeable future.
>
>
>
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