Japan is set to ramp up the printing presses this year to increase the amount of its largest denomination bill in circulation as citizens are increasingly hoarding cash amid a negative interest rate policy which the Bank of Japan (BOJ) rolled out in February.
Japan’s Finance Ministry is planning on printing 1.23 billion ¥10,000 notes in fiscal year 2016, which is 180 million more notes than a year earlier, The Japan Times reports.
There will be 200 million ¥5,000 bills issued in fiscal 2016, down by 80 million, and 1.57 billion ¥1,000 bills, down by 100 million.
Recent BOJ data show daily averages for currency in circulation rose 6.7 percent from a year before to ¥90.3 trillion at the end of February, the sharpest growth in 13 years.
The number of ¥10,000, ¥5,000 and ¥1,000 bills in circulation will increase 6.9 percent, 0.2 percent and 1.9 percent, respectively.
Over the past year the total amount of cash stashed at home by Japanese savers is estimated to have surged by nearly ¥5 trillion to some ¥40 trillion, according to Hideo Kumano, chief economist at Dai-ichi Life Research Institute.
He attributed the sharp increase due to people not wanting their wealth to become known by government authorities following the introduction of the “My Number” common identification system for tax and social security.
In addition, the BOJ’s negative interest rate policy “may have fueled concerns among the public about depositing their money in banks,” Kumano said.
An increasing number of Japanese savers are opting to keep their money safe at home rather than in banks, because interest rates on deposits have fallen to almost zero.
In late February, after the negative interest rate policy was implemented, Japanese hardware stores saw the demand for safes jump with some stores seeing sales 2½ times higher and some stores simply selling out.