TOKYO Feb 14 The Japanese mutual funds market
suffered an investment loss of $29 billion in January, the first
fall in five months, but it posted solid net inflows with
investments in equity funds reaching their largest amounts since
Japanese retail investors shifted back to equity funds as a
new tax-break facility dubbed NISA, for the Nippon Individual
Savings Account, kicked off in January.
NISA is aimed at driving massive Japanese savings into
stocks and mutual funds.
In December, investors had pulled out from equity funds as
they collected proceeds from there ahead of a doubling of
Japan's capital gains tax, which took effect from Jan. 1.
The country's tax on capital gains and dividends was raised
to 20 percent from 10 percent at the start of January, as a
special tax break given to support share prices expired.
Retail investors parked their proceeds in money reserve
funds in December ahead of the launch of NISA. The Japanese
government projects the tax-break accounts could draw more than
$250 billion by 2020.
Nomura Research Institute's survey this week estimated the
number of accounts in NISA could grow to 8.65 million by the end
of the year.
Nomura expects the total investment amount in the NISA
facility may reach 4.1 to 5.5 trillion yen this year.
Net inflows in equity mutual funds totalled 1.31 trillion
yen ($12.8 billion) in January, a sharp reverse from net
outflows of 573 billion yen, the Investment Trusts Association
of Japan said.
Conversely, the money reserve fund saw the largest ever net
outflow of 1.05 trillion yen in January, resulting in pushing
down the overall value to 10.1 trillion yen from a record high
of 11.2 trillion yen the previous month.
The overall asset value of the country's mutual funds
market, which is the second largest in the Asia-Pacific region
after Australia and the ninth largest in the world, fell 3.2
percent to 78.9 trillion yen in January.
The market suffered investment losses of 2.94 trillion yen
in January after it hit 81.5 trillion yen at the end of December
-- the highest since October 2007.
($1 = 102.1650 Japanese yen)
(Reporting by Chikafumi Hodo; Editing by Jacqueline Wong)