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Strategies & Market Trends : Asia Forum
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To: Mohan Marette who wrote (3051)4/11/1998 3:15:00 PM
From: Bonnie Bear  Read Replies (1) of 9980
 
Or is it a boost to bonds?
The reason the Japanese have an average of 200,000 in cash is because they had 350,000 before their stock market crumbled. They are elderly, they don't have social security and need the money to live in the most expensive country on earth. U.S. brokers can't make lousy investments of the life savings of old widows without going to jail, lucky for them Japan doesn't have as many attorneys as the U.S.
If they bought US bonds at 6% it would be a terrific deal- would drive down our bond yields- and may or may not help stocks- and long as the exchange rate didn't kill them.
Japan will probably have to raise the yen a lot to keep money at home.
The other problem with the Japan liquidity story is the tremendous real-estate debt of the average Japanese, on properties that have devalued well below the debt.
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