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To: carranza2 who wrote (31657)	4/16/2003 9:53:02 PM
From: Wyätt Gwyön	Respond to of 74559

hi c2, I wonder where one can track the rate of asset repatriation by Japanese companies/investors in terms of publicly available info, you can check the BoJ and MoF sites. most of their info is in Japanese but they have helpfully put the balance of payment tables in English: mof.go.jp they also sell a bunch of publications: boj.or.jp please note that currently, and for the last more than 30 years (with a brief hiatus during the 70s "oil shock), Japan has maintained a current account surplus. hence the "rate of repatriation", so to speak, is negative. Asset repatriation is also a step the Japanese could have taken long ago. If it is a (somewhat) rational tactic, I wonder why it hasn't taken place it is a deliberate part of national policy (mercantilist policy) to keep the value of the yen low. until a few decades ago, Japanese cos could not even directly handle the foreign exchange they received. it was put into a special account held by the BoJ. this has changed today, but the BoJ still maintains a massive special account called the Foreign Exchange Special Account (FESA). FESA is one of the tools by which the BoJ holds a lot of foreign exchange off of its balance sheets. when a Japanese co takes dollars from exports and deposits them with a Japanese bank, what happens to the dollars? the banks can be directed through informal pressure (very effective) from the MoF to purchase US Treasury bonds, for example. another thing they can do is turn the money over to the BoJ. what does the BoJ then do with this foreign exchange? if it sells it on the open market, it would drive up the value of the yen. instead, it does something called "sterilizing", whereby it takes the foreign exchange off its balance sheet and puts them in the FESA. the FESA assets are funded not by monetization, but by direct national budget appropriations and bill sales. this means the national budget pays directly to fund these dollars. this is one way that Japanese people are forced to endure a lower standard of living thanks to their national policy (because taxes go to fund the FESA). right now i believe the FESA holds something like $400 billion in USD. this has rocketed up from around $60 billion in 1990, so it gives you an idea of the tremendous accumulation of dollars going on there.

To: carranza2 who wrote (31657)	4/17/2003 12:43:28 AM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 74559

carranza2, Repatriation of Japanese wealth, primarily from US$ denominated investments into Japanese yen denominated investments, is unlikely in the near term future. As long as the Japanese equivalent of Joe Six-Pack has very few viable investment opportunities in Japan, s/he will remain quite content to leave their investments in the relative perceived safety of US$ denominated investments. The Japanese may switch their investments from stocks and stock funds to bonds and bond funds, or they may have their liquid cash in money markets, savings accounts and CDs. The interest rates in the money markets and other cash accounts are quite low, but no where near as low as equivalent accounts in Japan. Traditional and mutual distrust between the Japanese and the Chinese would make it unlikely that the Japanese would switch over to Chinese investments as well. Competition between Japanese employers and companies based elsewhere in Asia make it unlikely that the Japanese would invest in their competitors either. So for now anyway, the money is likely to mostly stay in the USA. But as the American economy slides further into debt, and gains from investing in the US economy becomes more difficult, the possibility of repatriation becomes more likely. As the old Wall Street saying goes, "Fear is a bigger motivator than greed!"... KJC