Cash

Lugging Cash A Good Cash Business In Japan?

In Japan, might security companies — you know, the kind in armored trucks that lug money around — get a boost from society’s yen for yen?

Bloomberg News notes that the current environment of “ultra” low interest rates, marching in lockstep with a fondness for hard currency in the form of notes and coins, may be of benefit for firms in the business of carrying the assets from place to place. The place to place might expand a bit — as in regionally, as in moving into the countryside.

Love of cash comes as people don’t squirrel it away, given that interest rates in Japan are infinitesimal, and savings accounts yield about 0.001 percent in interest. Monetary policy is unlikely to boost rates.  Cash in circulation has doubled to 106 trillion yen over the past two decades, even as demographics (a growing elderly population) have led to a population decline and gross domestic product, or GDP, has remained relatively stagnant.

Cash is about 20 percent of GDP, and credit and debit cards are at 17 percent of private consumption, compared to, say, 85 percent for South Korea, according to stats by the Japan Consumer Credit Association.

Bloomberg notes that regional banks are seeking to boost margins by cost cutting, which is shifting attention to business with logistics outfits, such as Nippon Express and Asahi Security (via Secom), and sunny days might also be ahead for cash-counting machine firm Glory.

Such firms also benefit from low crime rates, which means that transporting cash is a much less risky proposition. United Nations data via the Office on Drugs and Crime show that robberies in the U.S. and Europe are multiples higher than are seen in Japan.

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