— BOJ: +3.1% Marks 2nd Consecutive Y/Y Rise
— BOJ: End-Mar Household JGB Holdings -4.5% Y/Y At Y34.39 Trln
— BOJ: Household JGB Holdings Mark 3rd Straight Quarter of Y/Y Drop
— BOJ: Non-Japanese JGB Holdings Y47.30 Trln, -16.2% Y/Y
— BOJ: Household Cash, Deposits Up 1.5% To Y798.2 Trln

TOKYO (MNI) – The value of financial assets held by Japanese
households rose 3.1% on the year to Y1,452.8 trillion at the end of
March, also up from the balance of Y1,452.5 trillion at the end of
December last year, preliminary data released by the Bank of Japan on
Thursday showed.

The 3.1% rise was the second consecutive y/y rise following a
revised 2.2% rise at the end of December, 2009.

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 March, the TOPIX, the key index of the Tokyo Stock
Exchange, traded at 978.81, up from 773.66 a year before.

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.

The BOJ’s monthly economic report for June said on Tuesday that
private consumption, notably durable goods consumption, is picking up
partly due to policy measures.

It also said, “Domestic private demand is expected to continue
improving, but the pace of improvement is likely to remain moderate for
the time being amid the strong sense among firms of excessive capital
stock and employment.”

Today’s data is consistent with consumer data released by the
government.

Japan’s Consumer Confidence Survey index posted its fifth
consecutive monthly gain, rising to 42.8 in May from 42.0 in April, as
fears of job and wage cuts continued to recede although fewer people
thought it was a good time to buy durable goods.

The headline index hit the highest level in 31 months, matching
42.8 marked in October 2007, and all the sub-indexes have also recovered
to the levels seen about three years ago.

The Cabinet Office left its assessment unchanged from the previous
month, saying: “Consumer confidence continued picking up.”

The value of shares and other equities held by Japanese households
at the end of March rose 23.8% year on year to Y102.5 trillion,
accelerating from a revised 16.0% rise three months earlier, the data
showed.

The value of investment trusts at the end of March was up 15.6% y/y
at Y54.6 trillion, also accelerating from an unrevised 10.8% rise at the
end of December.

The value of cash and deposits held by households at the end of
March rose 1.5% on year to Y798.2 trillion, marking the 13th consecutive
quarter of y/y gains, unchanged from a 1.5% rise at the end of December,
the data showed.

The outstanding balance of Japanese government bonds held by
households at the end of March was down 4.5% from a year earlier at
Y34.4 trillion, posting the third consecutive y/y drop, with the pace
of decline unchanged from a 4.5% fall at the end of December.

The outstanding balance of JGBs held by domestic financial
institutions at the end of March totaled Y563 trillion, up 9.5% from a
year earlier.

The data also showed that the outstanding balance of Japanese
government debt including short-term paper held by non-residents at the
end of March totaled Y47.30 trillion, down 16.2% from a year earlier.

JGB holdings by non-residents at the end of March accounted for
5.7% of the total JGB balance of Y834 trillion, down from 7.1% from a
year earlier.

The value of foreign currency denominated bonds held by Japanese
households at the end of March totaled Y9.31 trillion, up 46.0% from a
year earlier but slowing from a revised 133.5% rise at the end of
December.

The Y9.31 trillion is the highest level since the end of June 2008
when it was at Y9.9 trillion.

Meanwhile, the balance of foreign currency denominated deposits
held by the households at the end of March was at Y5.3 trillion, up 2.0%
from a year earlier but slowing from an unrevised 6.9% rise three months
ago and marking the ninth consecutive year-on-year rise.

The balance of financial liabilities held by the Japanese
government was at Y1,001.8 trillion, up 4.8% from a year earlier.

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

[TOPICS: M$J$$$,M$A$$$,MMJBJ$,MAJDS$]