Nearly 20% of Japan households using e-money but cash still king

About 18.5 percent of Japanese households said they use electronic money, such as smartphone apps and debit card payments, on shopping trips where ¥1,000 or less is spent. (AFP)
Updated 18 November 2019

Nearly 20% of Japan households using e-money but cash still king

  • About 18.5 percent of Japanese households said they use electronic money, such as smartphone apps and debit card payments
  • Prime Minister Shinzo Abe is pushing to make more Japanese switch to cashless payments

TOKYO: Almost a fifth of Japanese households use electronic money for small purchases, a survey by a central bank-affiliated research institute showed, up from a year ago and a sign the country’s cash-hoarding culture is changing.
In the survey published on Monday and conducted between June and July, 18.5 percent of households said they use electronic money, such as smartphone apps and debit card payments, on shopping trips where ¥1,000 ($9.17) or less is spent, up from 15.4 percent in the previous year.
Among single-person households — 43 percent of whom are in their 20s and 30s — the ratio was much higher at 35.6 percent, suggesting government efforts to prod Japanese to go cashless may be paying off, at least among the younger generation.
Despite the growth in electronic payments, Japan’s “cash-is-king” mentality remains entrenched with the survey showing 84 percent still use notes and coins for small purchases.
And for payments exceeding ¥10,000 and up to ¥50,000, 48.5 percent of households said they pay by cash and 3.4 percent by electronic money, the survey showed.
A low crime rate, years of ultra-low interest rates and a nationwide network of automatic-teller machines (ATMs) have long made cash appealing in Japan, giving people few reasons to shift to cashless payments.
Prime Minister Shinzo Abe is pushing to make more Japanese switch to cashless payments to allow stores to automate sales estimates and banks to cut back on costly ATMs.
Shoppers have recently been encouraged to ditch cash for e-money after the government introduced a rebate program to ease the pain of a sales tax hike on Oct. 1.


$8bn blow to Erdogan as investors flee Turkey

Updated 09 July 2020

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.