Japanese investors' plans to move money to the US this fiscal year are vanishing faster than you can say WorldCom Inc.
Yasuhiro Miyata, manager for investment planning at Dai-Ichi Mutual Life Insurance Co, was among investors who dropped his plan to buy US stocks in the days after regulators began probing accounting practices at WorldCom, the No. 2 US long-distance phone company. Japan's second-largest life insurer had planned to put more money in US equities starting April 1.
Miyata and other investors say the dollar may weaken as US stocks fall and other companies draw attention from regulators and investigators.
"We don't know when stock prices will stop falling," said Miyata at Dai-Ichi, with ?2.9 trillion (US$24.9 billion) of overseas assets as of March. "The cases turned out not to be accidents, but a constant stream that undermined the whole accounting system of the nation."
Some fund managers are also concerned more losses may follow after the Standard & Poor's 500 Index fell 21 percent this year and the dollar dropped almost 12 percent against the yen.
The US currency will probably fall below ?115 by September, said Masafumi Tsuchida, manager for the Finance Group at Toshiba Corp, the world's second-largest chipmaker. He said he's looking for any gains in the dollar as opportunities to sell it.
Finance Minister Masajuro Shiokawa, speaking earlier this month when the dollar was at about ?120, said it may weaken to ?115.
Japanese fund managers aren't just losing money on US stocks. An index of Treasury bonds maturing in a year or more has handed yen investors a loss of 8.3 percent over the past three months, according to the European Federation of Financial Analysts' Societies. An index of like-maturity Japanese bonds rose 1 percent.
"Declines in the dollar and stocks are damping the attraction of the US, in turn increasing the attraction of Japanese assets, especially bonds," said Yuuki Sakurai, who helps manage about ?1.7 trillion in debt at Fukoku Mutual Life Insurance Co.
Fukoku Mutual, the nation's 10th-largest life insurer, reduced its overseas holdings by selling Treasuries earlier this year and may not increase them soon, Sakurai said.
The danger now is that falling stocks will stall the world's biggest economy by making Americans cut back on spending, traders said. On Friday, an index of consumer confidence compiled by the University of Michigan had its steepest decline since the September terrorist attacks against the US.
"The risk is increasing that tumbling stocks and the economy go into a negative spiral, pulling each other down," said Takashi Miyazaki, one of the investors for ?1 trillion in stocks at UFJ Partners Asset Management Co. His company has fewer US stocks and more Japanese equities, proportionally, than are in benchmarks used to gauge performance.
Some Japanese investors say they're still considering moving money to the US, even if their plans are on hold for now, because the US economy may still grow faster than the economies of Japan or Europe.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from