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Investors are starting to invest in Japan again. However, this video brings up an interesting point. The investments may not be due to less perceived risk. Instead, they may simply be due to fewer issues than some of the other major powerhouses (e.g., the US and European Union).
Here is the video (it explains the blog's title):
http://video.foxbusiness.com/#/v/4157223/investors-finding-opportunities-in-japan/?playlist_id=87185
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I really think that it is because the US is on shaky grounds as well as the EU. Everyone is already investing in China, so the next logical place to go (because you can't invest everything in one country) seems to be Japan. However, their financial hardships have not been out of the news either, so maybe they have other motives for investing there that is neither perceived risk or the financial hardships of other countries
ReplyDeleteI see this largely as a flight to safety which is such a remarkably interesting trend in international finance. During the worst part of the financial crisis the Dollar actually appreciated because, despite the bad situation of the United States European investors wanted the safety of US government bonds. Japan seems to be the "safe country now" for better or worse.
ReplyDeleteJapan seems like the safest country right now to invest in but I don't know if this is a country that I can see start see the economy booming in next.
ReplyDeleteJapan's issues lie in the fact that they haven't changed their policies in forever and are now starting to see the effects of stagnation. However, maybe it is this sense of stability that people are choosing to invest in.
ReplyDeleteI found it interesting that investors are seeing Japan as the "safest" bet out there. Maybe it's because even though Great Britain has a different currency they are somehow tied to the problems of the European Union and the United States? It could only be good for the US if Japan strengthens its economy through this since we are such a large trader with them.
ReplyDeleteI think it is good that people are investing in Japan however I also agree with Dana. Their monetary policies may need to be loosened if deflation continues. I have heard and seen many people using the word "fragile" for Japan's economy and although they are heavily indebted I think this growth they are starting to see is nicely complemented by foreign investment..
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