Middle-class Japanese consumers are rushing to buy platinum as concerns over the government's ability to deal with the economic downturn persist, the Times reports today (11th February).

A number of Tokyo-based bullion dealers have revealed that they are experiencing a drought of platinum ingots and coins, forcing them to turn away customers as stocks dwindle.

Jonathan Allum, Chief Japan Strategist at KBC Securities, has explained that the trend can be explained in part by doubts over the ability of Economics Minister Kaoru Yosano to respond successfully to the current financial climate.

He was quoted by the newspaper as saying: "Some of Mr Yosano's previously expressed views do not wholly inspire confidence.

"This is a man who said on 28th January that a rise in the consumption tax could 'lay the foundations for increased consumption'."

Dealers have noted a spike in interest in the rare Canadian Maple Leaf palladium coin as investors look set to compete with the auto industry, which tends to be the biggest industrial buyer of the metal.

Meanwhile, major jeweller Tiffany confirmed that it is cutting prices in its Japanese stores by nine per cent, despite platinum sales at Tanaka Kikinzoku, the largest bullion dealer in Japan, increasing by 430 per cent in the past year.

According to the Times, this is set against the backdrop of a government thinktank predicting that the country's economy shrank by 10.59 per cent in Q4 2008 on a year-on-year basis - over double the estimates of a month ago.

Source:

Shortage of platinum after Japan buying spree (11/02/09)
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5704941.ece