Tokyo wants private money to flow into Asia

Tokyo wants private money to flow into Asia

TOKYO (Reuters): The Japanese government aims to encourage
Japanese private investors to sink money into Asian securities,
as its public aid has helped these nations to weather the crisis
and begin heading towards recovery, officials said.

"It is of paramount importance to encourage Japanese private
money, including pension funds, to flow into Asian nations after
a round of the public aid and now that growth in the region is in
sight," Japan's top financial diplomat Eisuke Sakakibara said on
a TV program on Sunday.

Japan last October introduced the Miyazawa Plan, official
financial assistance worth US$30 billion over two years for cash-
strapped Asian nations. About two-thirds of that has already been
committed, Sakakibara said.

In order to spur Asian economic recovery, Sakakibara said,
Japan would add Vietnam to countries receiving help under the
Miyazawa Plan and push ahead with a debt-guarantee mechanism
included in the plan to help Asian nations raise funds from the
capital markets.

Shuhei Kishimoto, a senior official at the Ministry of
Finance's International Bureau, said in a ministry publication
that besides loans and debt guarantees, securities investment in
Asian nations was another potential Japanese contribution.

"With 1,200 trillion yen ($9.92 trillion) worth of individual
assets in Japan having trouble finding attractive places for
investment, it is worth considering investing Japan's postal
savings and pension fund money in Asian stocks so the funds could
be used for infrastructure purposes in Asia," Kishimoto said.

Such long-term investments would also benefit Japan, which
will be increasingly burdened with rising pension payments
because of the expanding proportion of ageing people in its
society, he said.

Yasuyoshi Masuda, a senior economist at Fuji Research
Institute Corp, said: "The Miyazawa Plan is priming the pump for
private investment in Asia." He said the government apparently
now wants the private sector -- following in the government's
footsteps -- to resume investment in Asian nations.

Banking sources said the Finance Ministry was informally
asking major Japanese banks if they could increase lending in
Asia.

Masuda said many banks had maintained an interest in Asian
nations but were cautious about making aggressive loans and
investments there because of recent disposals of bad loans that
were made both overseas and at home.

But there was a chance the Finance Ministry might come up with
specific steps to encourage Japanese securities investment in
Asia, he said.

Masuda said helping Asian nations establish their own
government bond markets would also encourage Japanese private
money to flow there.