Board-Ansicht
Mix-Ansicht- INTERVIEW:Strong Japanese Gold Demand To Continue This Yr - Günter, 27.03.2002, 22:01
INTERVIEW:Strong Japanese Gold Demand To Continue This Yr
INTERVIEW:Strong Japanese Gold Demand To Continue This Yr
---Japan Gold Imports To Be Even Stronger In April, May
---Y10 Million Cap On Term Deposits Guarantee Spur Buying
---More Funds Flow Expected Into Gold, Away From Deposits
By Wong Chia Peck
SYDNEY, March 22 (Dow Jones)--Japanese investors' appetite for gold will
grow even bigger this year, particularly after April 1 when the Japanese
government will pull the plug on its blanket guarantee for bank deposits, a
senior official of the World Gold Council told Dow Jones Newswires Friday.
Following an astronomical surge in the country's February gold imports, the
WGC projects that Japanese demand to be stronger in April and May. Indeed, he
projects that imports to continue to remain high this year.
Key behind the strong demand is the"psychological nervousness" amongst
Japanese investors and the spectre of more bank failures as the Japanese
banking system remains fragile, Itsuo Toshima, Japan's regional director for
the World Gold Council, told Dow Jones Newswires in an interview Friday.
Japanese investors' deposits are currently insulated from any bank
failures. But that will change starting April 1, when the government's
guarantee is extended only up to Y10 million deposits. Any money over this
amount will be lost in the event of a bank failure.
"So far, the Japanese deposits are protected, but only after April will
they feel the pain, so the impact on investors will be more severe," said
Toshima.
Japan's Ministry of Finance's latest figures show an astronomical 662% rise
in February's gold imports to around 19.8 metric tons from a year ago. The
huge jump in February showed"the severity of the economic crisis," he said.
Toshima declined to provide a forecast of how much gold Japan would import
in April.
Japanese investors are drawn to gold because it is a tangible asset that is
all the more valuable in the prevailing doom surrounding the Japanese economy
and banking system, Toshima said.
A gold buying boom by Japanese in January and February was responsible for
leading the spot market to leap to a two-year high of US$307.80 a troy ounce
on Feb. 8. Industry participants continue to monitor Japanese activity when
trading gold.
More Gold Buying Likely Ahead Of April 2003
While Japanese investors still have other investment options, such as
investing in the U.S. dollar itself or depositing with foreign banks, they
still prefer gold, which Toshima described as"nobody's liability."
If they bought the U.S. dollar, they would be exposed to credit risk as
they have to deposit it in a bank and take on the bank's liability, he
explained.
Which is why, in spite of the risk of theft, Japanese investors prefer to
take their gold bars home, in turn driving up sales of home safes and the
stock prices of those companies, Toshima mused.
There appears to be more potential for Japanese investment in gold,
particularly as the government will apply the Y10 million cap to all ordinary
bank deposits from April 1, 2003, he said.
"That will be the worst time for Japanese depositors."
In addition, despite the current surge in Japanese investment in gold, that
still takes up a tiny drop of the Y5 trillion of the country's total financial
assets of Y1.4 trillion yen, indicating the huge portion of funds that could
still flow into gold, he said.
Assuming that only 0.1% of the Y263 trillion, currently tied up in term
deposits, flows into gold, that would mean Japanese would buy a ballpark
figure of 200 tons of gold, he said.
The series of bond debacles over the past few years also"shattered the
myth that fixed income paper assets (are) safe," leading the Japanese to move
into something more tangible like gold.
Even the disadvantage of holding gold - that it doesn't provide any
interest - is no longer a deterrent to investors due to the low Japanese
interest rates, Toshima said.
"Basically, the gold buying is expected to continue as it is rooted in the
structural problems of the Japanese economy and the debts held by Japanese
banks," which are likely to stay so for another year, he said.
---
Wong Chia Peck, Dow Jones Newswires; 61-2-8235-2957
chia-peck.wong@dowjones.com
<center>
<HR>
</center>
Thread gesperrtgesamter Thread:
