— BOJ: +2.5% Marks 1st Y/Y Rise Since End-Sep 2007
— BOJ: End-Dec Household JGB Holdings -4.5% Y/Y At Y35.03 Trln
— BOJ: Household JGB Holdings Mark 2nd Straight Quarter of Y/Y Drop
— BOJ: Non-Japanese JGB Holdings Y51 Trln, Down 8.8% Y/Y
— BOJ: Household Cash, Deposits Up 1.5% To Hit Record Y803.5 Trln

TOKYO (MNI) – The value of financial assets held by Japanese
households rose 2.5% on the year to Y1,456.4 trillion at the end of
December 2009, also up from the balance of Y1,437.7 trillion at the end
of September last year, preliminary data released by the Bank of Japan
on Tuesday showed.

The 2.5% rise was the first y/y rise since the end of September
2007, when the assets rose 2.3% on year. It followed a revised 0.8% drop
during the July-September quarter of 2009, the data showed.

The rise in the financial assets held by households was due to
higher values of investment trusts, shares and other equities, according
to the data.

At the end of December 2009, the TOPIX, the key index of the Tokyo
Stock Exchange, traded at 907.59, up from 859.24 a year before, a BOJ
official told reporters.

The BOJ’s preliminary flow of funds data suggested that personal
spending is likely to remain solid for the coming months, partly due to
the recent rise in the value of financial assets held by households.

Higher financial assets is supportive to consumer prices and
sentiment.

Japan’s consumer confidence index posted the second consecutive
monthly gain, rising to 39.8 in February from 39.0 in January, as fears
of job and wage cuts continued to ease and more people were still
willing to buy durable goods, the latest government data showed.

This prompted the Cabinet Office to upgrade its assessment, saying:
“Consumer confidence is nearly flat.”

The value of shares and other equities held by Japanese households
at the end of December 2009 rose 16.2% year on year to Y96.69 trillion,
reversing from a 8.7% drop three months earlier, the data showed.

The value of investment trusts at the end of December was up 10.8%
y/y at Y53.04 trillion, also reversing from a 12.1% fall at the end of
September.

The value of cash and deposits held by households at the end of
December rose 1.5% on year to hit a record high of Y803.5 trillion,
marking the 12th consecutive quarter of y/y gains, the data showed.

The outstanding balance of Japanese government bonds held by
households at the end of December was down 4.5% from a year earlier at
Y35.03 trillion, posting the second consecutive y/y drop, with the pace
of decline accelerating from a 0.9% fall at the end of September.

The data also showed that the outstanding balance of Japanese
government debt including short-term paper held by non-residents at the
end of December totaled Y51 trillion, down 8.8% from a year earlier,
compared with a 7.6% fall at the end of December 2008.

No historical data were available for non-resident holdings of JGBs
excluding short-term paper.

The value of foreign currency denominated bonds held by Japanese
households at the end of December totaled Y7.69 trillion, up 104.0% from
a year earlier.

Meanwhile, the balance of foreign currency denominated deposits
held by the households at the end of December was at Y5.29 trillion, up
6.9% from a year earlier.

The balance of financial liabilities held by the Japanese
government was at Y993.8 trillion, up 7.3% from a year earlier.

hinoue@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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