Stitch,
I believe this is a little confusing because we are discussing two issues at the same time. One is the desire for the Japanese citizen to invest their money where it is not only safer, but can earn more, AND the other is a matter of necessity for some Japanese citizens, corporations or their government, to withdraw funds from the US already invested in treasuries, securities, real estate, etc. because they have to due to financial difficulties at home.
If you are asking why don't they pull their investments out of the US? Those answers are easy. They want their money in the US because:
1. They can earn a higher interest rates in the US vs. earning 1% in their banks back home.
2. They can make extra money knowing the yen is getting weaker while their money is simply parked here. So they make money off the exchange rate difference if nothing else. Before they weren't as confident the yen was going to get weaker. Now they are.
3. They now know they are "officially" in a recession with no clear end in sight. So their equities markets are not going anywhere while they see ours going to the sky.
4. They see their banks releasing more news each day about bad debt problems and they probably have more confidence in our banking system right now.
If you are asking why doesn't the Japanese government simply demand, through their legal system, their citizens to repatriate their money, well that's an entirely different subject (Remember that Rush Limbaugh of Tokyo post I did).
I'm not quite sure I understood your question but I hoped this helped.
MikeM(From Florida)
PS The article below shows one reason Zeev (If I'm not confused by what he said) thinks the US equities markets are still heading higher.
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Wall Street awaits summer rally, seen weathering Asian storm
By Pierre Belec
NEW YORK (Reuters) - The Wall Street summer forecast: rising stocks that will weather the Asian storm clouds....The experts say the odds are good that the rally will be explosive rather than a disappointing wet firecracker, thanks to the Asians and a strong U.S. econony. They are betting that as much as the Asians hate their own disintegrating stock markets, that's how much they love the rock-solid U.S. stocks. The worse the situation gets in the Pacific Rim, the more attractive the United States will be to global investors looking for shelter. The Asians have two other choices -- stuff their money in bank accounts or mattresses. |
