Nikko, the first to launch a fund for mainland-issued assets, hopes to attract buyers seeking higher yields offshore
Japanese savings investors' desperate need for higher returns suggests that a ground-breaking fund investing in mainland-issued yuan bonds could be the first of many.
China looms large on the radar screen of the world's largest creditor nation that has net foreign assets of about 175 trillion yen (HK$12.15 trillion) and has long chased high yields in foreign markets due to its near-zero domestic interest rates, according to Nikko Asset Management fund manager Hiroki Miyazato.
Nikko, one of Japan's three largest asset managers, last week announced the launch of the first fund to invest in mainland-issued bonds under China's qualified foreign institutional investor (QFII) scheme.
'Japanese investors have invested in the US dollar, euros, the Australian dollar and so forth. Now it is Chinese yuan,' said Mr Miyazato from his office in Japan.
He ruled out suggestions that Japanese investors were chasing a possible upward revaluation of the yuan, but were seeking to diversify holdings into a balanced global portfolio. Nikko's bond offering was likely to be the first of many QFII funds targeting Japan's yield-hungry investors, he said.
'We are investing because of China's stable inflation environment, its [solid] financial status and overall economic growth rate,' Mr Miyazato said.
