Investment in Precious Metals Increasingly Common in Japan

Economy

Tokyo, Aug. 13 (Jiji Press)--Investment in gold and other precious metals is increasingly common in Japan, with some using them as safe-haven assets or to hedge risks.

Precious metals are assets that are valuable in themselves and different from shares in companies that would become worthless if they go bankrupt.

As the price of gold often moves differently compared with major financial products, some investors use it to diversify their portfolios in order to minimize losses when the prices of stocks and other financial products plunge.

The total net asset value of Mitsubishi UFJ Trust and Banking Corp.'s four Fruit of Gold series exchange-traded funds, which are linked respectively to gold, silver, platinum and palladium, stood at 73.6 billion yen as of Aug. 1, up over 20 times from their listings on the Tokyo Stock Exchange in July 2010.

The value of the gold ETF came to 58.8 billion yen, skyrocketing nearly 30 times from the debut. "The asset value of the gold ETF has been increasing stably, regardless of market conditions," Osamu Hoshi, executive adviser at the trust bank's Frontier Strategy Planning and Support Division, said, indicating that it has been used from a medium- to long-term investment point of view.

[Copyright The Jiji Press, Ltd.]

Jiji Press