In a previous post, I mentioned how cash was being hoarded by Japanese people, referring to an elderly retired couple who had their home broken into and their life savings of $US450,000 stolen. At the time I published this post, I didn’t have any idea how much money was being stashed by the Japanese but knew it was a very large amount. This hoarding of cash is being driven by an increasing fear of the current banking circumstances. The figure is much higher than I first thought. It is estimated to be at around ¥40 trillion (US$368 billion) sitting as cash in the homes of Japanese people. There will be a new type of “entrepreneur” on the streets of Tokyo looking for any information that might help them target specific homes where cash is being hoarded. Guard your cash Japanese people. Money should be a public utility for everyone’s benefit, not something to hoard. One up shot of any potential threat of robbers stealing hoarded cash is that at least all this money will be returned to the economy.
Burglar’s Dream: Japanese Stop Banking, Hoard Over $368 Billion at Home
April 4, 2016
On Thursday, the Japanese Finance Ministry announced plans to increase the number of ¥10,000 bills in circulation amid signs that mounting numbers of people are hoarding cash.
Financial analysts believe that some Japanese are keeping cash at home, rather than depositing funds in banks, because interest rates on deposits have fallen to zero after the Bank of Japan introduced its negative interest rate in February.
Hideo Kumano, chief economist at Dai-ichi Life Research Institute, estimates that Japanese citizens are presently stashing some ¥40 trillion ($368 billion) at home. Kumano has an altogether different theory for the trend, suggesting that people do not want their wealth to be known following the introduction of a new tax and social security regime.
Nonetheless, Japanese consumers have not limited their spending habits. Recent Bank of Japan data shows daily averages for currency circulation have risen 6.7 percent from the previous year, the sharpest single jump in 13 years, and a sign that the Japanese economy remains robust.
Officials announce that the country will print 1.23 billion ¥10,000 notes in FY2016, 180 million more than the previous year. The number of ¥10,000 issued annually had previously been capped at 1.05 billion from FY2011 to FY2015.