Wednesday, 6th April 2016
In General Japan News,
Japan to print more high-denomination banknotes
The bank of Japan is set to print an additional 180 million of its highest denomination banknotes as the population hides them away from a rainy day.
Fewer 10,000 yen (£64) notes are being circulated widely, leading to the need for more in the fiscal 2016 year.
Since 2010, 1.05 billion of these notes have been produced annually, but this is being upped by 17 per cent to 1.23 billion for the current period.
While electronic payments are popular in Japan, cash in circulation is increasing, with the Asahi newspaper reporting it reached 90.3 trillion yen (£577 billion) in February.
This is an increase of 6.7 per cent compared to a year earlier.
The reason for this is down to money being stashed in people’s homes as opposed to going to banks, which is in turn two-fold.
Changes to taxation laws in Japan have left people keen not to put their cash into banks, where they will receive negative nominal interest rates anyway.
Martin Schulz, senior economist with the Fujitsu Research Institute, told The Telegraph: "The changes in tax laws and speculation over negative interest rates at banks has caused a change in saving behaviour here.
"The introduction of a global income tax system as well as a global asset tax is encouraging Japanese to store more at home in the form of cash."
Estimates suggest that the amount squirreled away could be as much as 40 trillion yen (£256 billion), which is reinforced by regular news articles reporting large amounts of money being disposed of by mistake by Japanese citizens.
This is not a new phenomenon, with one instance in 2012 involving a waste disposal employee in Hiroshima handing 10 million yen (£64,000) over to police.
The cash had been stashed in an item of furniture and was already shredded by the time it was discovered.