Japan fund holdings of foreign assets rise in Jan http://today.reuters.com/news/articleinvesting.aspx?type=companyNews&storyID=2007-02-14T080259Z_01_T106088_RTRIDST_0_MARKETS-JAPAN-FUNDS.XML
Wed Feb 14, 2007
TOKYO, Feb 14 (Reuters) - Japanese investment trust holdings of foreign assets rose by 1.0925 trillion yen ($9.01 billion) in January, hitting a record high and helping to push the yen to a four-year low against the dollar and a record trough versus the euro.
Combined investment trust holdings of bonds, stocks and money market instruments totalled 28.8241 trillion yen last month, another record high according to data going back to 1989, data from Japan's Investment Trust Association showed on Wednesday.
Holdings of all three categories hit record highs last month, the figures showed, showing that domestic investors kept their voracious appetite for higher-yielding foreign investments.
Stock holdings rose 401.6 billion yen to 5.9897 trillion yen, pushing their share up to 20.8 percent, the highest since mid-2002, as an improving global economy has made investors more keen to take risks in overseas stocks.
On the other hand, the percentage of total bond holdings slipped to 63.8 percent, the lowest since mid-2001. Still, bond holdings rose 244 billion yen to 18.3899 trillion yen.
Investment in money market instruments rose 446.9 billion yen to 4.4444 trillion yen, taking their percentage of the whole to 15.4 percent, the highest since early 1993.
Long exasperated by paltry yields at home thanks to years of near-zero rates, Japanese have been ploughing funds into investment trusts featuring oversees assets offering higher returns.
Because of this demand, domestic investment trust funds featuring foreign assets have more than doubled in value over the past two years, keeping the yen under constant selling pressure as such funds are not typically currency hedged.
Broken down by currency, U.S. bond holdings, by far the most popular foreign investment, rose by 154.3 billion yen to 6.7686 trillion yen, while U.S. stocks rose 134.8 billion yen to 2.2307 trillion yen, the highest of all overseas stock holdings.
Holdings of bonds denominated in higher-yielding currencies like sterling and the Australian dollar rose last month, although New Zealand dollar bonds, which are popular as they offer some of the highest rates in the developed world, slipped a touch.
Canadian bond holdings rose, after falling for three months in a row. Hong Kong stocks, the second most popular stock destination, rose slightly to 1.0697 trillion yen, while Indian stocks, the third most popular, rose to 411.6 billion yen.
JAPAN FUND HOLDINGS OF FOREIGN ASSETS (in billion yen)
Jan Change Change
from Dec year-to-date -------------------------------------------- Stocks 5,9897 +401.6 +401.6 (+7.2%) Bonds 18,3899 +244.0 +244.0 (+1.3%) Money mkt 4,4444 +446.9 +446.9 (+11.2%) Total 28,8241 +1,092.5 +1,092.5 (+3.9%) ($1=121.14 Yen)
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