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| gettyimagesbank |
By Yi Whan-woo
More Koreans are buying yen as they expect the historically weak Japanese currency to recover its value sometime in the future.
The data compiled by five major lenders ― KB Kookmin, Shinhan, Hana, Woori and NongHyup ― showed that combined deposits in Japanese currency totaled 604.6 billion yen ($4.63 billion) in April, up from 584.3 billion yen in March. The April figure was also up 22 percent from the year end in 2021.
Yen deposits have increased especially steeply since March, accounting for almost half of the aggregate increase in deposits during the first four months of this year.
Financial industry analysts noted that this increase has come as the yen is at its weakest level against the Korean won in nearly four years, amid the Japanese central bank's ultra-easy monetary policy in contrast to hikes in the benchmark interest rate in other major economies.
For years, it was considered virtually a norm that 100 yen be traded at 1,000 won or slightly higher.
After falling below the 1,000 won-level on March 28, the Japanese currency did not climb back and has mostly remained in the range of 970 won to 980 won per 100 yen since.
In particular, it slid to a yearly low of 965.53 won per 100 yen on April 19.
As the weakening yen will persist for the time being, analysts expect that investment in yen, which is one of the world's top currencies, along with dollar and euro, will continue in Korea.
However, investors are advised to be cautious as the weak yen may continue for quite a long period. "Though the yen is cheap, it is not very attractive as an investment. As its status as a safe asset is weakening, it is hard to maximize investment returns," said Kim Hyo-jin, an analyst at KB Securities.
