The Avanti Group are advising clients on the increasing demand for gold, as Japanese increase their purchasing volumes to compensate for weakening yen, potentially putting strain in the country’s holdings.
The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to the increasing demand in gold sales throughout Japan.
“There’s a big consensus from individual investors in Japan that are looking to introduce larger quantities of gold into their investment portfolios as an asset as well as security for the future, with an increase in investors wanting to use gold partly to hedge against their yen-based assets such as stocks and properties,” said Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.
Tanaka Kikinzoku Kogyo K.K., is Japan’s largest trader in bullion, are confident that sales to Japanese investors may surpass purchases this year for the first time since 2004 as the yen’s deflated value and low gold price give rise to buying interest. The decline into a bear market in April encouraged demand for jewelry and coins around the world and physical demand increases for wedding seasons and religious festivals in Asia, including India and China, the biggest buyers throughout the second half of the year.
Following unprecedented monetary stimulus as part of Japan’s efforts to end deflation ‘Abenomics’ the yen depreciated 14 percent against the U.S. dollar. Gold purchased in U.S. dollars dropped 27 percent whilst the commodity fell 15 percent in yen this year resulting in an increase in gold imports to Japan that more than doubled to 7,686 kilograms in January to May, from 2,994 kilograms a year earlier, according to finance ministry data.
“Whilst global investors are taking advantage of the weakening yen, investing in sound cheap positions within Japan, locals investors within Japan are looking to place their money into solid tangible investments, currently gold with the added benefits exchange ratio to investment,” concluded Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.
The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.