Tuesday, July 10, 2007

Japan Individual Investment

From Reuters Bonds:

Japan fund May foreign asset holdings jump $9.5 bln

Japanese investment trust
holdings of foreign assets shot up 1.157 trillion yen ($9.51
billion) in May as individual investors kept hunting down
overseas assets offering higher yields, keeping the yen under
 Total holdings rose to 33.4563 trillion yen last month, the
highest on records dating back to 1989, figures from Japan's
Investment Trust Association showed on Wednesday. So far in
2007, foreign asset holdings have swelled by 5.7247 trillion yen
($47 billion).
Investments in foreign stocks, bonds and money market
instruments all rose to their highest levels ever last month,
helping to push the yen to its lowest level since 1985 on a
trade-weighted and inflation-adjusted level.
 Dismayed by paltry domestic interest rates that remain well
below those abroad, Japanese households continue to plough their
savings into higher-yielding and riskier assets overseas.
 Buying in foreign investments helped to push the yen down
around 2 percent against the dollar last month. The Japanese
currency has continued to suffer this month, dropping to a 4
1/2-year trough around 122.30 per dollar on Wednesday.
 Overseas stock holdings rose 647.6 billion yen to 8.5212
trillion yen, more than double what they were in July last year.
 Bond investments climbed 266.8 billion yen to 19.4983
trillion yen, while holdings of money market instruments climbed
242.5 billion yen to 5.4367 trillion yen.
 Demand for overseas investments is seen climbing, as many
Japanese are expected to use summer bonuses in the coming months
to buy more overseas assets, particularly given that global bond
yields have surged since the beginning of June.
 Japanese government bond yields also have jumped in the past
few weeks as investors sell paper in anticipation the Bank of
Japan will lift its overnight rate to 0.75 percent as early as
August, but they are well below U.S. Treasury yields.
  Ten-year Treasuries yields are some 3.32 percentage points
higher than 10-year JGB yields, near the widest spread in four
 Broken down by currency, U.S. bond holdings -- by far the
most popular destination for foreign fixed income holdings --
rose 108.7 billion yen to 6.7122 trillion yen.
 U.S. stock holdings rose 217.1 billion yen to 2.9922
trillion yen last month, helping to drive the Dow Jones
Industrial Average (.DJI: Quote, Profile, Research) to a record high at the start of June.
 Both debt and share holdings in Australia, Canada and
Britain crept higher last month, while bond investment in New
Zealand, whose 8.0 percent interest rate is the highest in the
industrialised world, slipped from April.
 Investments in Hong Kong stocks, the second most popular
among equities, inched up 15.2 billion yen.
(in billion yen)
                   change          change
            May      from April     year-to-date
Stocks 8,521.2 +647.6 +2,933.1 (+52.4%)
Bonds 19,498.3 +266.8 +1,352.4 (+7.4%)
Money mkt 5,436.7 +242.5 +1,439.2 (+36.0%)
Total 33,456.3 +1,157.0 +5,724.7 (+20.6%)

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