“Japanese invest more overseas”

Japanese investment trusts' holdings of overseas assets rose for the ninth straight month to a record high in February, in spite of the Bank of Japan's mid-month decision to double interest rates.

The data underline Japanese investors' enthusiasm for putting money abroad - a drive that has encouraged the carry trade by keeping the yen weak.

The numbers suggest Japanese interest rates must rise considerably further in order to persuade Japanese investors to stop taking money out of domestic bank accounts paying very low rates of interest and putting them into overseas investments earning much higher returns. The Bank of Japan's benchmark interest rate is still only 0.5 per cent.