"Let's Buy Before It Rises"... Yen Deposits Increase After Three Months

Bank of Korea's 'February Resident Foreign Currency Deposit Trends'
Spread of Expectations for Japanese Interest Rate Hike

The Bank of Japan (BOJ), Japan's central bank, is expected to raise interest rates for the first time in 17 years, leading to an increase in yen deposits after three months.

According to the "Resident Foreign Currency Deposit Trends for February 2024" released by the Bank of Korea on the 19th, yen deposits among resident foreign currency deposits at foreign exchange banks increased by $460 million at the end of last month. This reflects expectations that the yen, which has been weak recently, could strengthen if the BOJ normalizes its monetary policy.

Resident foreign currency deposits refer to foreign currency deposits held domestically by nationals, domestic companies, foreigners residing in Korea for more than six months, and foreign companies operating in Korea. Overall, resident foreign currency deposits totaled $96.13 billion, down by $197 million from the previous month.

Euro deposits increased by $180 million due to temporary deposits of export proceeds by some companies.

On the other hand, dollar deposits decreased by $2.53 billion due to a decline in export-import volumes compared to the previous month and increased overseas investment by some companies. The customs-based export-import volume decreased from $110.7 billion in December last year to $190.1 billion in January and $100.5 billion in February.

By sector, corporate deposits (with a balance of $80.75 billion) decreased by $212 million, while individual deposits (with a balance of $15.38 billion) increased by $15 million.

By bank type, domestic banks (with a balance of $85.54 billion) and foreign bank branches (with a balance of $10.59 billion) decreased by $102 million and $95 million, respectively.