- "We are losing confidence in the US.''
-
- TOKYO (Bloomberg) -- Japanese
investors' plans to move money to the U.S. 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 U.S. stocks in the days after regulators began probing accounting practices
at WorldCom, the No. 2 U.S. long-distance phone company. Japan's second-largest
life insurer had planned to put more money in U.S. equities starting April
1.
-
- Miyata and other investors say the dollar may weaken
as U.S. 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 yen ($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 U.S. currency will probably fall below 115 yen 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 yen, said it may weaken to
115.
-
- Bond Losses
-
- Japanese fund managers aren't just losing money on U.S.
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 U.S., in turn increasing the attraction of Japanese assets,
especially bonds,'' said Yuuki Sakurai, who helps manage about 1.7 trillion
yen in yen 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 U.S.
-
- Negative Spiral
-
- "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 yen in stocks at
UFJ Partners Asset Management Co. His company has fewer U.S. 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 U.S., even if their plans are on hold for now, because
the U.S. economy may still grow faster than Japan or Europe. Federal Reserve
Chairman Alan Greenspan said this week the nation's economy is gaining
strength and can overcome a loss of faith in its corporations.
-
- Earnings for U.S. companies may rise in the second half,
analysts said. Profits will probably climb 16.3 percent in the third quarter
and 28.6 percent in the fourth quarter, according to Thomson First Call.
-
- 'Losing Confidence'
-
- "We'd like to buy U.S. stocks if coming corporate
earnings show improvement,'' said Dai Higashino, who helps manage 500 billion
yen at Sakura Investment Management Co.
-
- New regulations for corporations may also help U.S stocks,
he said. U.S. lawmakers are working on new criminal penalties for corporate
fraud.
-
- The bulls are in the minority.
-
- "We are losing confidence in the U.S.,'' said Kazuyuki
Takigawa, one of the investors for about 100 billion yen in overseas debt
at Fuji Investment Management Co.
-
- Takigawa sold dollars for euros in June and said he doesn't
plan to change that position. "The dollar is not a currency we can
buy right now.''
|
