Japan household assets hit record

[HenryTo]

Combined with the fact that commerical land prices rose for the first time in 16 years in Japan last year, one can most probably conclude that the dangers of deflation are now passing in Japan.
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Japan household assets hit record 1,541 trln yen
Fri Mar 23, 2007 5:18 AM ET

TOKYO, March 23 (Reuters) - Financial assets held by Japanese households hit a record high in the October-December quarter as individual investor demand for slightly riskier assets such as investment trusts grew while Japan's economy continued to recover.

The Bank of Japan's quarterly flow of funds survey showed on Friday that the value of household holdings of financial assets rose 1.0 percent from a year earlier to 1,541 trillion yen ($13.1 trillion).

That was the largest amount since the flow of funds data was first compiled in March 1980, the BOJ said.

The amount increased from the July-September quarter's 1,513 trillion yen, which was revised up from a previously announced 1,495 trillion yen.

The total value of investment trusts held at households also jumped to a record high of 66 trillion yen by the end of December, jumping 29.5 percent from a year before.

The investment trust figures include equity and bond funds.

The weight of investment trusts in overall financial assets held by Japanese households rose to 4.3 percent at the end of 2006, also a high.

By contrast, the weight of bank deposits and cash in overall financial assets dipped to 50.5 percent from 51.3 percent at the end of 2005, reflecting a fund shift to higher-yielding but riskier assets at Japanese households.

The total amount of bank deposits and cash fell 0.5 percent to 779 trillion yen at the end of December from 783 trillion yen a year before.

The weight of bank deposits and cash in overall financial assets at Japanese households is traditionally very high.

Meanwhile, the value of household holdings of shares and equities fell to 183 trillion yen at the end of last year from 191 trillion yen at the end of 2005, indicating that investors remained cautious about investing in stocks, which can be even riskier assets than investment trusts.

The value of share holdings alone stood at 109 trillion yen, down from 115 trillion yen a year before.

The Nikkei share average <.N225> shot up 40 percent in 2005, though its pace of rise slowed to 7 percent in 2006. It has climbed overall this year although the going has been rocky. The share average hit a seven-year closing high of 18,215 on Feb. 26 before taking a big slide amid a four-week sell-off in global equities.

[rffrydr]

Uridashi bonds the elephant in the Australisian living room: positions representing sizable portions of NZ and Aussie GDPs are "luckily" being rolled over.

The G7 carry unwind has been blunted and push to Chinese-like capital contols in economic management increases.

Master H. said it would be like this:

http://www.theaustralian.news.com.au/story/0,20867,21459942-643,00.html
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Bonds have responded. Biggest fall since Dec. (after signifcant rally, of course):


http://www.bloomberg.com/apps/news?pid=20601087&sid=a1_x2GSO5jEo&refer=home
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

...And the risks to global liquidity increasing. BOJ has been written off through the July elections. Officials have said that policy cannot be driven by land prices and carry concerns--but it's not ignored either.

Stay tuned.
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Today is the Tomorrow you worried about Yesterday!