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Mix-Ansicht- Gold in Japan - CRASH_GURU, 20.11.2004, 15:46
Gold in Japan
-->>>>Japan investors seek gold after quake, typhoons
Thu Nov 18, 2004 10:56 PM ET
By Chikafumi Hodo
TOKYO, Nov 19 (Reuters) - Japanese investors are flocking to gold coins and bars amid an increased willingness to diversify into hard assets after a series of typhoons lashed the country and a major earthquake struck last month, industry sources say.
Conservative Japanese investors tend to sell gold in a bull market, and the benchmark dollar-based spot price is near a 16-year high. But their behaviour is different this time.
The retail arm of Japan's largest bullion house, Tanaka Kikinzoku Group, said its sales of gold to investors rose sharply in October and the trend was carrying over into this month as the natural disasters had raised demand for the yellow metal.
"The Niigata earthquake has probably had a big psychological impact on investors, making them want gold as a safe-haven asset," said Nobuhiro Tominaga, gold advisor at Tanaka Kikinzoku Jewellery, referring to the deadly quake in northern Japan.
"They seem to be more eager to hold physical assets after having witnessed many natural disasters this year."
Tanaka did not disclose specific volumes of gold, but said sales of gold coins and bars rose 30 percent in October from a year earlier and jumped 60 percent against the previous month.
Japan was hit by its deadliest earthquake in a decade last month, followed by a string of aftershocks. It has also been swept by a number of powerful typhoons this year, with one in late October having killed more than 90 people.
A record 10 typhoons have made landfall in Japan this year, four more than the previous high.
FIREPROOF ASSET
Television stations have kept the disasters in the public eye by repeatedly broadcasting scenes of destruction and the aftermath.
For example, some broadcasters have shown people in Niigata saying their bankbooks and money stashed at home had been lost in the quake.
Such reports could have made people more eager to hold gold because in Japan, a killer quake could hit any place, any time, market participants say.
"In our annual surveys, we always find a high percentage of people saying they want to buy gold because it is a fireproof asset," said Itsuo Toshima, Japan and South Korea regional director of the World Gold Council.
"This is very unique... we don't see this kind of reason in other countries."
Toshima also said investors had grown more cautious recently.
"In recent seminars, especially since the Niigata earthquake, I've been frequently asked about the toughness of gold... whether it will melt in a fire," Toshima said.
Recent rises in gold prices have not affected investor appetite, with demand already in place due to the scrapping of a government guarantee on bank deposits at the end of March 2005.
The guarantee was partly lifted in 2001 when the government limited protection for deposits at 10 million yen ($95,950), which resulted in heavy gold purchases at the time.
Gold is also in the spotlight as a weak dollar has prompted fund operators and investors to throw money at the precious metal, moving away from recently favoured crude oil.
Spot gold moved up to a 16-year high of $445.90 an ounce on Thursday in New York, up nearly 5 percent since the start of the month and 20 percent from this year's low hit in May.
Reflecting that trend, the retail price of gold in Japan was pegged near a 12-year high of 1,608 yen per gram as of Friday.
"The present situation of high prices doesn't matter because there is a sense of urgency among investors about wanting to diversify into gold," Toshima said. ($1=104.22 yen)
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