Today, I will explain the following website. (AI-generated)
止まらぬ円安のウラに新NISA?「家計の円売りが効いている」「まさに副作用」円安抑止の“処方箋”は?（TBS NEWS DIG Powered by JNN） – Yahoo!ニュース
Contents
Understanding the Rapid Yen Depreciation
The Japanese yen has been experiencing a significant decline in value, which has been attributed in part to the new NISA (Nippon Individual Savings Account) system that started in 2024. Experts suggest that the expansion of the tax-free investment limit to 18 million yen under the new NISA policy has led to an acceleration of personal investments in foreign assets, contributing to the rapid depreciation of the yen.
What’s Behind the Unstoppable Yen Weakness?
The relentless weakness of the yen can be linked to the increased activity of personal “yen selling” by Japanese households. This term refers to the trend of individuals selling their yen to invest in foreign currencies that are perceived to hold more value. This shift is driven by the desire for higher returns and the fear of holding onto a depreciating currency.
The Impact of New NISA on the Japanese Yen
The new NISA has been a key policy of the Kishida administration, designed to boost personal investment. However, this has led to an unintended consequence: a surge in capital outflow from Japan to overseas markets. The Ministry of Finance reported that investment in foreign stocks and bonds by investment trust companies hit a record high of approximately 1.3 trillion yen in January 2024.
Expert Opinions on the Yen’s Decline and Future Outlook
Analysts are paying close attention to the trend of personal yen selling, which is expected to gain prominence alongside institutional investors. Concerns about the future and the use of NISA for foreign currency investments have created a spiral effect, exacerbating the anxiety over holding yen and further driving its depreciation.
Personal Investment Trends in Japan
There has been a noticeable increase in personal investment activities in Japan, with a significant portion of individuals shifting their focus to foreign assets. This trend is partly due to the new NISA policy, which has expanded the investment opportunities for Japanese households.
The Surge in Personal “Yen Selling” Activities
From January to April 2024, the total investment in overseas assets by Japanese individuals is estimated to reach around 4 trillion yen, nearly three times the total for the previous year. This indicates a growing trend of personal “yen selling” activities among Japanese investors.
How New NISA is Influencing Japanese Investors’ Behavior
The new NISA has triggered a shift in investment behavior among Japanese individuals, with many opting to sell their yen in favor of investing in foreign currencies. This is a response to the declining value of the yen and the search for more stable and profitable investment options.
Government Policies and the Currency Market
The government’s introduction of the new NISA policy has had a significant impact on the currency market, particularly on the value of the yen. While the policy was intended to encourage long-term asset formation, it has also led to short-term effects on the currency’s value.
Is the Government’s New NISA Policy a Catalyst for Yen Weakness?
Some experts argue that the new NISA policy has acted as a catalyst for the yen’s depreciation. The policy’s expansion of the tax-free investment limit has made it more attractive for individuals to invest in foreign assets, leading to increased selling of the yen.
Analysts’ Take on the Side Effects of New NISA
While the new NISA policy has its benefits, analysts also point out the side effects, such as the rapid yen depreciation. The policy has led to a shift in investment behavior, which has had unintended consequences on the currency market.
What Could Be the “Prescription” to Curb Further Yen Depreciation?
To address the ongoing depreciation of the yen, analysts suggest that a “prescription” may be necessary. This could involve measures to stabilize the yen and restore confidence in the currency, potentially through government intervention or adjustments to monetary policy.
