Moving / Investing yen to US

[Oreo_no_papa]

Hi, first time posting here! I haven’t found good info for people in our particular situation, and hoping to get some ideas here. Or even recommendations for a professional that might help.

I am a US citizen, my wife is Japanese with a green card, we live in the US, and plan to continue doing so. She recently inherited a substantial sum of money in Japan, which is now sitting in her old Mitsubishi UFJ bank account, earning zero interest.

So we want to get the money to the US, as effectively and cheap as possible, so we can invest it. At least for the moment, it seems smartest to wait with fingers crossed that the yen strengthens again. But we want to get a system in place. It’s complicated by the fact that we live in the US. At the point we want to transfer, in the current situation, she would need to fly back to Japan and walk into a branch to do that.

I’m thinking we will open an account with Interactive Brokers. Transfer the yen there, then convert to USD and invest when we feel the time is right (or more likely, do it in multiple chunks to average the risk). Sounds like the only cost would be the Lifting Fee by Mitsubishi, but no way to avoid that. Only other cost is that currently JPY interest rates are actually negative for amounts over 5 million- they charge us a percentage.

So what if we had a multi-currency account, held in the US, that we could transfer the JPY into? Let it sit there until FX rate is more favorable, then move to IBKR, convert to USD and invest. Looks like Citibank used to offer this, but no longer do? Any suggestions?

Thanks for any ideas at all!

J

[sutebayashi]

So we want to get the money to the US, as effectively and cheap as possible, so we can invest it. At least for the moment, it seems smartest to wait with fingers crossed that the yen strengthens again.

What if the yen continues to weaken?

You could convert it all to USD now and put it into some USD MMF and I think make 4-5% per annum, could you not?

How much would the yen need to strengthen to best that?

Just my two yen’s worth…

So just looking for as cheap a transfer and forex conversion as you can find might be the approach I’d take, but I am a bit bearish on the yen.

Only other cost is that currently JPY interest rates are actually negative for amounts over 5 million- they charge us a percentage.

Whoah really?!

[TokyoWart]

Prestia offers structured deposit accounts where you can essentially make a bet with them about exchange rates for a specific term of time, get a higher interest rate and control the exchange rate at which you are willing to make the conversion. This is a speculation because no one knows what exchange rates will do and the product is structured so that Prestia is making the safer bet (you only get the currency conversion if the rate is what you committed to or worse) but at least it avoids the negative interest rate issue you are facing.

https://www.smbctb.co.jp/en/product/dep ... ncurrency/

[Oreo_no_papa]

Prestia offers structured deposit accounts where you can essentially make a bet with them about exchange rates for a specific term of time, get a higher interest rate and control the exchange rate at which you are willing to make the conversion. This is a speculation because no one knows what exchange rates will do and the product is structured so that Prestia is making the safer bet (you only get the currency conversion if the rate is what you committed to or worse) but at least it avoids the negative interest rate issue you are facing.

https://www.smbctb.co.jp/en/product/dep ... ncurrency/

Interesting, but that looks a little too spicy for us! Thanks for the idea.

[Tkydon]

As you are resident in the US, and not in Japan:

She could set up a WISE account in the US.
WISE Accounts outside Japan do not have the same balance Limit as those registered in Japan.
You can leave the money in there in Yen until you want to switch it to Dollars.
You can then have WISE switch to Dollars in one go, or in blocks, and transfer to her Bank or Investment Account,
or
You can transfer to her Bank or Investment Account, and have them do the conversion.
or
I might transfer the Yen in Yen, to WISE and then to an Investment Account, invest in Yen denominated Japanese Assets (like Warren Buffett), and wait for the Yen to strengthen (When the world starts cutting interest rates), and then sell the Japanese Assets and then maybe switch to other assets...

[Oreo_no_papa]

As you are resident in the US, and not in Japan:

She could set up a WISE account in the US.
WISE Accounts outside Japan do not have the same balance Limit as those registered in Japan.
You can leave the money in there in Yen until you want to switch it to Dollars.
You can then have WISE switch to Dollars in one go, or in blocks, and transfer to her Bank or Investment Account,

Yes been wondering about Wise, but regardless of balance limit, the transfer limit is 1 million JPY. That's going to make it kinda a pain to move the amount of funds we are talking about.

or
You can transfer to her Bank or Investment Account, and have them do the conversion.
or

Fees from banks other than Wise or IBKR don't make sense, we'll lose too much on the conversion.

I might transfer the Yen in Yen, to WISE and then to an Investment Account, invest in Yen denominated Japanese Assets (like Warren Buffett), and wait for the Yen to strengthen (When the world starts cutting interest rates), and then sell the Japanese Assets and then maybe switch to other assets...

Right, that sounds like our best plan, with IBKR. Although again, don't know that we will use Wise due to the transfer limits. Hadn't really considered buying Japanese assets instead of letting the JPY sit, and not sure if it's possible without living in Japan? Will need to look into that, but it would be the best of all worlds I think.

[Tkydon]

As you are resident in the US, and not in Japan:

She could set up a WISE account in the US.
WISE Accounts outside Japan do not have the same balance Limit as those registered in Japan.
You can leave the money in there in Yen until you want to switch it to Dollars.
You can then have WISE switch to Dollars in one go, or in blocks, and transfer to her Bank or Investment Account,

Yes been wondering about Wise, but regardless of balance limit, the transfer limit is 1 million JPY. That's going to make it kinda a pain to move the amount of funds we are talking about.

or
You can transfer to her Bank or Investment Account, and have them do the conversion.
or

Fees from banks other than Wise or IBKR don't make sense, we'll lose too much on the conversion.

Banks charge the Bank Spread between the Mid Market Price and their Buy (TTB) or their Sell (TTS) Price; usually Y1 per Dollar each way.

Brokerages such as IBKR usually change a much smaller spread as they expect to make money on the brokerage fees and higher volumes.

I might transfer the Yen in Yen, to WISE and then to an Investment Account, invest in Yen denominated Japanese Assets (like Warren Buffett), and wait for the Yen to strengthen (When the world starts cutting interest rates), and then sell the Japanese Assets and then maybe switch to other assets...

Right, that sounds like our best plan, with IBKR. Although again, don't know that we will use Wise due to the transfer limits. Hadn't really considered buying Japanese assets instead of letting the JPY sit, and not sure if it's possible without living in Japan? Will need to look into that, but it would be the best of all worlds I think.

By Yen denominated assets, I meant Japanese Equities or Japan Equity ETFs and Mutual / Index Funds, such as TOPIX, Nikkei 225, etc., which should be available through most brokerages such as IBKR.

[Oreo_no_papa]

Cool, I didn't think there was anything yen-denominated we would be allowed to buy. Thanks!

[Oreo_no_papa]

Well, running into a snag. Wife is in Tokyo, and called MUFG to set up an appointment to make the transfer to IB. They let her know that they will need the recipient's name, account, etc, etc, and address. Trouble is, she is the recipient, and the address is in the US, and we think this would tip off MUFG that she no longer has an official Japanese address. Losing her only Japanese bank account would be a bit of a disaster. So we are thinking the transfer should wait until all other banking needs are complete- house sold, taxes paid, everything. Then if they make her close the account, not much harm done. That could take a long while, but don't know what else to do without risking the bank account!

[captainspoke]

I realize this is a step away from your plan to use IB, but look at it as background information. Anyway, take a look at this wiki, and perhaps some of the links within it: https://www.reddit.com/r/JapanFinance/w ... /transfers

I'm not sure when that was last refreshed, so one or another bank or service may have changed/upgraded somehow (gotten cheaper, or some re-jiggering of costs), but in an overall/general sense, it's a good picture of things.