Taipei--Bank of Taiwan (??), the largest lender in the country, said on Friday that its cash supply of Japanese yen is more than adequate to deal with demand, in an effort to calm the concerns of consumers anxious to buy the Japanese currency and take advantage of the unit's recent weakness against the Taiwan dollar.
Bank of Taiwan placed 600 million yen (US$5.35 million) in cash behind the counter of its headquarters in Taipei soon after opening for business on Friday, while also denying a local media report that said the bank was experiencing a shortfall in yen after a sudden upsurge in demand for yen a day earlier.
The bank said the 600 million yen is only a small fraction of its yen cash inventory, emphasizing there are no supply concerns.
On Thursday, the yen fell to a low of NT$0.2691 at one point, the lowest in 18 months against the Taiwan dollar, which triggered a buying spree among consumers looking to visit Japan now or later. Japan is one of the favorite destinations for Taiwanese travelers.
China Times said in a front-page story that Bank of Taiwan sold 10 billion yen on Thursday, the largest-ever daily yen sale in the bank's history, which caused a shortage in supply and forced the bank to seek external yen supplies from foreign banks.
On Friday, the yen regained its footing against the Taiwan dollar to range between NT$0.270-NT$0.272, the selling price asked by Bank of Taiwan, as the local currency trended lower against the U.S. dollar amid rising fears that the U.S. Federal Reserve will raise its key interest rates in June.
The bank admitted that some of its branches have only 60-100 million yen in cash on hand so they sent staff to company headquarters on Friday for more yen to meet strong demand.
The bank added that it has not had to seek assistance from foreign counterparts to boost its yen cash stocks.
The recent weakness of the yen came at a time when currency traders moved their funds out of the Japanese currency to other regional units amid eased concerns over geopolitical tensions, the dealers said.
They said the NT$0.27-mark was a psychological level for the yen so that after witnessing the currency fall below that level on Thursday, selling in the Japanese unit intensified on the local foreign exchange market.
In addition to Bank of Taiwan, other local banks such as as Mega International Commercial Bank (???), Bank SinoPac (???) and E. Sun Commercial Bank (???), which have offered relatively better terms for yen purchases, also saw strong demand for yen in recent days.
Source: Focus Taiwan News Channel