TOKYO, SEPT. 18 -- For weeks, economists have been voicing mounting concern that Japan's huge banks and insurance companies are starting to unload their investments in the U.S. stock and bond markets, a development that could pose a severe threat to the already weak American economy.
Finance Ministry figures show that from January to June of 1990 Japanese investors sold $8.9 billion more of U.S. stocks and bonds than they bought -- a striking reversal of the tens of billions of dollars worth of net purchases Japanese firms made each year during the later part of the 1980s.
Today, a senior official of the Finance Ministry signaled that the government is aware of the problem and may take measures that would alleviate it: The ministry, he said, favors putting an end to the recent surge in Japanese interest rates. That would reduce the risk that Japanese investors will dump their U.S. holdings and bring their money home to earn high yields.
The official, who briefed reporters on condition that his name not be used, noted that Japan's central bank raised its benchmark discount rate last month by 0.75 percentage points, to 6 percent. "We don't think ... we should take additional action" to raise rates, he declared.
The U.S. discount rate is 7.5 percent, but with inflation factored in an investor would still make more money in Japan than in the United States if rates stay where they are. A similar situation exists with the United States and Germany, and some recent reports indicate that Japanese investors may be shifting funds from the United States to Europe.
The Finance Ministry does not control the central bank but it exerts a strong influence over the bank's policies. And the official's remarks are significant because they come at a critical juncture in a decade of long growth of Japanese investment in the United States that has helped to keep the American economy afloat.
The Nihon Keizai Shimbun, Japan's national business newspaper, started publishing a front-page series this week quoting top officials at major insurance and brokerage companies saying that their enthusiasm for U.S. investments has cooled markedly in recent months.
The chief reason for the change, analysts say, is that U.S. interest rates have fallen and Japanese rates have risen, meaning that American investments no longer offer higher yields than those available on Japanese investments.
The consequences are potentially serious. Economists fear that if the Japanese reluctance to pour money into the United States persists, American companies will have trouble finding the funds they need to expand. Such a development would be most unwelcome at a time when the U.S. economy is near or actually in a recession.
Some analysts contend that the recent trend is temporary and that the alarm is excessive. Japanese financial firms, these analysts say, are selling some U.S. holdings to compensate for losses sustained on the Tokyo stock market earlier this year. The flow of capital from Japan, they predict, will soon resume.
The senior Finance Ministry official struck a tone of moderate caution, saying: "It might be wrong if I said I was not concerned at all" about the slowdown in Japanese investment in the United States. But, he added, "It is a little too early to judge that this is a fundamental, basic trend."