Japan investors turn to REITs as inflation play

TOKYO: Yield-hungry investors have been betting that Japanese real estate investment trusts (REITs) will pay off as asset prices rise and interest rates remain stable, with the instruments growing in popularity among both retail and institutional investors.

The Tokyo Stock Exchange REIT Index pushed to 13-month highs this month, and has risen around 3% so far this year, helped by the introduction in January of the Nippon Individual Savings Account.

The tax-break facility was set up to give Japanese retail investors incentive to move their funds to other assets from historically low-earning saving accounts, whose cash value erodes as the Bank of Japan slowly moves closer to meeting its 2% inflation target. — Reuters

This article first appeared in The Edge Financial Daily, on June 13, 2014.

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