Exclusive outtakes from industry leaders
A few years ago, domestic and international financial players were chomping at the bit to lure Mrs. Watanabe’s millions of yen or fellow Asians’ yuan, won or dollar holdings from their futons or equal-interest savings accounts.
The global financial crisis in the last year has sparked a rejigging of foreign institutions’ expectations about Asian wealth and their own ability to attract it, with some opting out of the game altogether.
Barclays Asia-Pacific CEO Robert Morrice isn’t letting his rivals’ woes temper enthusiasm.
He says the No.2 British bank will boost staff and its private banking arm, Barclays Wealth, expects to manage $20 billion in Asia outside of Japan by 2012, compared with $10 billion at end of this year.
No country has been a bigger fan of the dollar over the years as Japan. You can see it in the country’s $1 trillion of foreign exchange reserves almost entirely concentrated in U.S. bonds or the sheer portfolio flows in the greenback month after month. But that may be changing. Yuuki Sakurai, head of financial planning and investment at Japan’s No. 9 life insurer Fukoku Mutual Life, said the dollar’s long role as the centre of the global currency universe may be coming to an end, partly due to politics. “Look at the U.S. position in the world community, that’s changing and that’s part of the story. I think Pax Americana, that regime is gone. But it’s not happening overnight, it’s changing gradually,” said Sakurai, whose oversees about $54 billion of assets, while speaking at the Reuters Japan Investment Summit. “If you think that a paradigm based on the dollar may be starting to change and that the euro’s weight globally may come close to matching the dollar’s presence, the dollar might fall to 80 yen in the future,” Sakurai said. “I am saying something a bit extreme, but the dollar might fall below 50 yen 10 years from now,” he said. The dollar is near 106.50 yen now, up from a 13-year low of 95.77 yen in March, but it is still not far from record lows against the euro.