Chinese investors take advantage of weak Japanese yen, collectible toys with invisible properties

A wave of interest in investing in Japanese assets is growing among China’s affluent middle class, driven by the weakness of the Japanese yen this year and concerns over China’s tough coronavirus controls.

The Japanese yen has weakened considerably against the Chinese yuan this year and hit its lowest level against the US dollar at the end of April.

There have been many inquiries from Asian investors recently, especially in Hong Kong, Singapore and mainland China, said Kin En, who runs a real estate agency in Tokyo.

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Most of the applications come from Chinese investors who want to buy city properties in Japan at the current low level of the yen, for future immigration purposes, she said.

Chinese wealthy individuals are not necessarily rushing to invest in properties in the West as they did in the past

Tina Chen, Guangdong

“Most of them are concerned about China’s increasingly strict Covid control measures. The lockdown in Shanghai has made them worried about the risks of loss of security, personal freedom, career and dignity of the day. the next day,” Kin said.

“In the meantime, they think it’s a good time to invest in Japanese assets. While house prices in Japan’s major cities have risen significantly over the past year, they remain affordable for middle-class investors in mainland China.

Deteriorating and cloudy China-West relations have unexpectedly increased the appeal of Japanese assets among wealthy Chinese, including business owners and middle-class residents of the River Delta. Pearls and the Yangtze Delta, the most developed regions of China.

“Chinese high net worth individuals are not necessarily rushing to invest in properties in the West as they have in the past…and from an investment security and profitability perspective, we are beginning to think that Japan’s assets are higher than those in Europe, and those in Europe are higher than those in the United States and Australia,” said Tina Chen, who works with a Guangdong-based consultancy that helps the continental rich to invest and immigrate abroad.

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Although a firm ally of the United States, Japan has strong ties to the Chinese market, and China-Japan relations are now more stable than China-US relations, she said.

The US dollar rose above the key 130 yen level last week for the first time since 2002, after the Bank of Japan doubled down on its very low yield policy.

According to Tokyo Kantei, the average asking price for a 70 square meter (753 square foot) second-hand apartment in Tokyo’s 23 wards had climbed for the 21st consecutive month to 67,840,000 yen (US$521,000) in March. .

This is an increase of 1.2% from February and 10.5% from March of last year. Some fixed prices in Tokyo have exceeded bubble-era highs.

Apartments in big cities like Tokyo can have a rental yield of 4-7% per year, which is a very stable and attractive investment for wealthy Chinese these days, Kin said.

“These well-located properties, with a price of around 70 million yen, are particularly rare, because according to the current exchange rate, it is around 3 million yuan, and an apartment in downtown Shanghai is two or even three times the price,” Kin added.

“Some customers decided to buy after looking at the exterior of the apartment and knowing where it was…Of course, that’s because they’ve been to Japan many times before and trust with the Japanese contractual spirit.

“We should see at least a 150% or 200% year-over-year increase in our sales to Chinese investors. [for April]and maybe more in the months to come.

[F]or every million yen spent, this is equivalent to a saving of 10,000 yuan compared to last year, due to the weak yen

Ben Deng, collector

Other investment categories, including Japanese whiskeys, artwork and collectible toys, and even cast iron teapots, are also highly sought after as collectibles, as most of the young Chinese generation is more attracted by works that mix both oriental traditions and modern civilization. , instead of traditional western art.

“Many Chinese malls and wealthy families also like to choose works by Japanese artists to decorate their properties…like Takashi Murakami and Yayoi Kusama,” said Newman Liang, the founder of Guangdong-based Target Xplus Advertising.

Ben Deng, who has been collecting action figures and other rare items for over 20 years, said: “Those limited-edition Japanese whiskeys or art toys, or even those fancy golf bags – for every million of yen spent, this equates to a saving of 10,000 yuan compared to last year, due to the weak yen, which is very attractive for Chinese collectors.

Hong Kongers again find Japanese real estate appealing amid weaker yen

Liang echoed Deng’s sentiment after selling two Japanese whiskeys at a big profit in March. They cost 1,600 yuan in 2020, but high demand pushed their value to 8,000 yuan.

“Two years ago, we expected the price of ordinary Japanese whiskey to increase by 10-15% per year, while the price of collectibles could double in just two years. Now it just goes higher.

Many Chinese are also eager to visit Japan for shopping, investing and doing business, looking to take full advantage of the weak yen. Travel restrictions imposed by China and high international parcel fees between countries have eaten away at collectibles earnings.

“I think the younger generation in Japan is adjusting to such a new boom of foreign investors,” Kin said. “Of course, there is now a lot of capital, which was once invested overseas, coming back to Japan… But in the face of different buyers, Japanese sellers definitely give priority to Japanese buyers.”

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