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Shoppers at the Miura outlet of Cainz Home DIY are confronted at the door by a glaring red sign asking: “How solid is YOUR negative interest rates strategy?” Underneath stands a selection of attractively priced safes.

The display is not abuzz with custom. Negative interest rate policy has certainly thrown things off-kilter but, for now at least, there is no mathematically compelling reason for ordinary Japanese to spend Y25,000 on a metal box to keep their cash at home. The 0.001 per cent rate that Japanese banks offer on a normal deposit account remains minutely above zero and the Bank of Japan’s policy has been crafted to ringfence individuals.

The big unanswered question — most particularly for the yen as it reels around in search of a natural post-NIRP range against the US dollar — is what those Japanese individuals are actually doing with their cash. The enigma has deepened following the Ministry of Finance’s most recent weekly portfolio data for the week ending on February 19 — a week that saw NIRP coming into force and spectacular Japanese net buying of foreign bonds (Y2.0tn) and foreign stocks (Y450bn). The former was the largest reading since the data became available in 2005 and the latter represented a 500 per cent increase over the previous week. It is tempting to think that a big chunk of this was Japanese individuals, sensibly opting for yield abroad over an expensive safe at home.

But the market does not know for sure and will not until the breakdown of the buying is revealed on March 8. Those figures, for which currency strategists are now on tenterhooks, will offer the crucial picture of how much of the foreign bond and stock buying was banks, pension funds or the sort of investment products (primarily investment trusts) that Japanese individuals tend to favour. The banks’ purchases would tend to be currency hedged, while the pension funds and investment trusts far less so.

If the breakdown shows that the buyers were banks, the yen may barely twitch from its Y112-Y113 per dollar range.

But if it emerges the outflows came from trusts buoyed with money staunchly refusing to sit in a safe, the market may bet heavily on weeks more of large, yen-depressing unhedged outflows.

leo.lewis@ft.com

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