The Japanese Finance Ministry plans to increase the number of ¥10,000 bills in circulation, amid signs that more people are hoarding cash and fighting the crazed Keynesian negative interest rate policy and new money tracking regulations.
It will print 1.23 billion such notes in fiscal 2016, 180 million more than a year earlier. The number of ¥10,000 bills issued annually leveled off at around 1.05 billion in the fiscal years from 2011 to 2015.
Some financial market sources believe it is because more people are keeping their money at home rather than in banks, because interest rates on deposits have fallen to almost zero after the Bank of Japan introduced a negative interest rate in February.
The total amount of cash stashed at home is estimated to have surged by nearly ¥5 trillion to some ¥40 trillion in the past year, Hideo Kumano, chief economist at Dai-ichi Life Research Institute, said.
He attributed the sharp increase to people not wanting their wealth to become known to authorities following the introduction of the My Number common identification system for tax and social security.
In addition, the BOJ’s negative rate policy “may have fueled concerns among the public about depositing their money in banks,” Kumano said.
There will be 200 million ¥5,000 bills issued in fiscal 2016, down by 80 million, and 1.57 billion ¥1,000 bills, down by 100 million.
(via Japan Times)
─ Some financial market sources believe it is because more people are keeping their money at home rather than in banks [...] ─
ReplyDeleteAnd what the Japanese Financial Ministry is doing is meant to stop that? Sounds more like the Ministry wants people to dump their cash holdings by buying goods. I don't think the Ministry expects people to return to the banks.