ID :
37502
Fri, 12/26/2008 - 11:15
Auther :
Shortlink :
http://m.oananews.org//node/37502
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Foreign Currency Deposits at Internet Banks Surging
Tokyo, Dec. 25 (Jiji Press)--Foreign currency-denominated deposits at Internet-only banks have been increasing rapidly in Japan on the back of the yen's appreciation, as customers hope to reap foreign exchange gains on the Japanese currency's possible downturn in the future.
The increase also reflects growing popularity of bank deposits over
investment in securities such as investment trusts amid the global economic
slowdown and stock price falls, analysts said.
Taking advantage of bearing no branch operation costs, online banks
set interest rates on both yen- and foreign currency-denominated deposits
higher than conventional commercial banks.
At Sony Bank, the monthly average of the amount of foreign
currencies purchased by its customers in October-November more than doubled
from that in the April-September first half of fiscal 2008.
Foreign currencies have been bought for future investment gains,
rather than for overseas trips, a Sony Bank official observed.
Another major Internet-only bank, EBank, also sees a sharp growth
in its foreign currency deposits.
As of Dec. 14, the balance of foreign currency-denominated deposits
increased 30 pct from the end-September to far exceed the yen deposit
balance, according to EBank.
SBI Sumishin Net Bank, which was launched in autumn 2007, said the
foreign currency deposit balance's increase in October was eight times
faster than the increase in September and four times faster in November.
The balance growth is in line with the customer tendency of buying
foreign currencies while the yen is strengthening, an SBI Sumishin official
said.
But the yen may not weaken at least in the immediate future.
The yen is expected to keep its strength against the dollar next
year, thanks to a further expansion in the U.S. current account deficit,
Toru Sasaki, chief foreign exchange strategist at JPMorgan Chase Bank, said.
Chances may be remote for foreign currency investors to make profit
by repurchasing the yen, foreign exchange experts said.
The increase also reflects growing popularity of bank deposits over
investment in securities such as investment trusts amid the global economic
slowdown and stock price falls, analysts said.
Taking advantage of bearing no branch operation costs, online banks
set interest rates on both yen- and foreign currency-denominated deposits
higher than conventional commercial banks.
At Sony Bank, the monthly average of the amount of foreign
currencies purchased by its customers in October-November more than doubled
from that in the April-September first half of fiscal 2008.
Foreign currencies have been bought for future investment gains,
rather than for overseas trips, a Sony Bank official observed.
Another major Internet-only bank, EBank, also sees a sharp growth
in its foreign currency deposits.
As of Dec. 14, the balance of foreign currency-denominated deposits
increased 30 pct from the end-September to far exceed the yen deposit
balance, according to EBank.
SBI Sumishin Net Bank, which was launched in autumn 2007, said the
foreign currency deposit balance's increase in October was eight times
faster than the increase in September and four times faster in November.
The balance growth is in line with the customer tendency of buying
foreign currencies while the yen is strengthening, an SBI Sumishin official
said.
But the yen may not weaken at least in the immediate future.
The yen is expected to keep its strength against the dollar next
year, thanks to a further expansion in the U.S. current account deficit,
Toru Sasaki, chief foreign exchange strategist at JPMorgan Chase Bank, said.
Chances may be remote for foreign currency investors to make profit
by repurchasing the yen, foreign exchange experts said.
