OFF INTO THE WILD WET YONDER How does this...
Japanese Retail Investors Scream “Risk On”
All lights show green for Japanese investors as they “banzai” into riskier investments backed by Japan Prime Minister Shinzo Abe’s “Abenomics” and his printing press.
Japanese financial advisors and bankers must be extremely busy moving investment capital into investment trusts focusing on high-yield corporate bonds and real estate investment trusts (REITs) in the United States while at the same time offloading major government bonds.
The irony here is thick, especially when you consider the Japanese government depends heavily on domestic buyers of government debt, to the tune of US$9.95 trillion. Let me say that once more… trillion. With a “t.”
“Retail investors have grown less risk-averse and are now seeking high returns,” says Tadaaki Komatsubara of Ibbotson Associates Japan. Of course, the risks are considerably negated if the economies of the countries that investors are investing in are on the rise. Investing in high-yield corporate bonds and REITs in a recovering economy is hardly a risky bet. But nevertheless, Japanese investors seem drunk at the Bank of Japan’s punch bowl and the corporate and real estate world smiles.