Japanese Prime Minister Fumio Kishida speaks at the New York Stock Exchange on Thursday. Photo: AP/Andres Kudacki
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Kishida pitches Japan's permanent investment tax break at New York bourse

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"if only we can find a way to wheedle all those savings out of people.... while convincing them it's not only a smart 'investment', but will also help Japan"

-4 ( +7 / -11 )

Oooh, Kishida…….words!

Lots and lots of words being said.

and that’s about it.

2 ( +9 / -7 )

Since he took office last October, Kishida has proposed a "new form of capitalism" that emphasizes wealth redistribution.

Exempting capital investment from taxes, incentivizing the stock market, giving subsidies to venture capital:

All things that point to wealth redistribution; towards the rentier investor class that is.

And there on Wall Street, an appropriate place for Kishida to announce another step in his grand plan of "New Capitalism".

1 ( +4 / -3 )

Kishida can spruik NISA all he likes, but aversion to risk is rising, a flight to safety is underway, and markets concomitantly cratering. Investors are now less concerned with protecting capital gains from taxation than tanking stocks and the erosion of capital it represents. Why put money into stocks, whose rise or fall, is inversely correlated with global interest rates. The cold equation is why take the risk when you can get 5% and principal guaranteed investing in something with only a fraction of the risk.

-2 ( +1 / -3 )

'Kishida said the potential of the proposed tax exemption system should be as powerful as that of the Los Angeles Angels' two-way baseball star Shohei Ohtani from Japan as it could help the Japanese economy to achieve "growth and sustainability."'

They can't go one second in an international forum without bragging about Japanese success stories (that they have zero part of). I'm just surprised he didn't also pitch it as "the only nation to have suffered atomic bombings, North Korean abductions, and major earthquakes and has shown our reconstruction and investment power" or some other such nonsense when making no sense.

-6 ( +6 / -12 )

all empty talk but no action.business as usual.empty suits.

-2 ( +3 / -5 )

 the world's largest bourse

Get with reality, no one uses this word any more. But I suppose the translators here are beyond being capable of using current English.

3 ( +8 / -5 )

Hey Kishida, do you know why people save ? There's no dreams in the Japanese society today, nothing to look forward to, nothing exciting to spend money on, and everyone expect that the future would be bleak, especially after your genius ex-finance ministry said it plainly that Nenkin will not be enough.

Japanese stocks ? lol lol, aside from Toyota and Canon, no other Japanese companies can excite investors, even those two stocks are relatively "boring" stocks. The rest of Japanese companies are zombies with outdated managements consisting of highly paid useless old men who are just cruising waiting for their retirement.

No sane investors would invest in Japanese stocks, even Japanese buy S&P500.

-4 ( +5 / -9 )

Why dont they do thse things when people might actually give a rats

-4 ( +0 / -4 )

@ smithinjapanToday  06:17 pm JST

you forgot: "as the only nation to mount a successful Olympic Games during the time of the Covid pandemic" lol

-7 ( +5 / -12 )

The cold equation is why take the risk when you can get 5% and principal guaranteed investing in something with only a fraction of the risk.

I do not know how you can get 5% capital guaranteed even in USD. The best you can do is 4 % with a 2 years treasury bond if you keep it until maturity. Maybe some banks offer deposit at 5% but then you take a credit risk on the bank.

Not investing at all when you have significant inflation is the worst you can do as you are sure to see your capital loose it’s value overtime.

If you invest, preferably in US assets, and keep your investment over the long term through the highs and lows you are very likely to be a winner over a 10 years period (As long as you invest through low cost products like ETF).

3 ( +4 / -1 )

smithinjapanToday 06:17 pm JST

'Kishida said the potential of the proposed tax exemption system should be as powerful as that of the Los Angeles Angels' two-way baseball star Shohei Ohtani from Japan as it could help the Japanese economy to achieve "growth and sustainability."'

> They can't go one second in an international forum without bragging about Japanese success stories (that they have zero part of). I'm just surprised he didn't also pitch it as "the only nation to have suffered atomic bombings, North Korean abductions, and major earthquakes and has shown our reconstruction and investment power" or some other such nonsense when making no sense.

Yeah, and maybe he doesn't want to face the fact that most Japanese players in MLB are not success stories and just average at best. Just keep throwing Ohtani's name around and everything will work out fine!

-2 ( +2 / -4 )

Kishida said such tax incentives are necessary because Japan has 2,000 trillion yen in personal financial assets but "only around 10 percent" is invested in stocks.

So it is better to buy now Japanese stocks as when this personal financial assets starts to flow in to the market the will be a great time to cash out.

0 ( +2 / -2 )

I do not know how you can get 5% capital guaranteed even in USD. The best you can do is 4 % with a 2 years treasury bond if you keep it until maturity. Maybe some banks offer deposit at 5% but then you take a credit risk on the bank.

Government deposit guarantees are perhaps not to be trusted, but investing in stocks means a quantum increase in risk exposure. Which is why investors are now seeking shelter in bank paper. With no end in sight to interest rate increases, 5% or conceivably more will very likely soon be possible.

Not investing at all when you have significant inflation is the worst you can do as you are sure to see your capital loose it’s value overtime. If you invest, preferably in US assets, and keep your investment over the long term through the highs and lows you are very likely to be a winner over a 10 years period (As long as you invest through low cost products like ETF).

Not just speculators and those who can afford to lose, but millions of others whose wealth is tied up in cratering stocks are staring down the barrel. Index funds aren’t going to save you when all the indexes are cratering at the same time. To take one example; the NASDAQ is off 25% this year. There must also come a point too, where even those like yourself, with long investment time lines, begin to contemplate what-ifs they may never previously have imagined possible. After the 1929 crash, the Dow didn’t recover for a generation. Nobody wants to sell at a discount to what they paid and investors who can afford to wait are well advised to do so, thereby not crystallising losses. That’s a luxury however which many, especially those facing margin calls, cannot afford and there is an inexorable logic to a falling market with no bottom in sight. Each fresh wave of selling ratchets up the pressure on the holdouts so that people who refused to accept a 20% loss end up capitulating at 60% or more, rather than face even greater losses.

-1 ( +0 / -1 )

If Kishida’s plan is to extend NISA well that’s nice, but NISA is pretty small cookies, to be frank.

I used to allocate some of my investments to Japanese stock indexes in the early days of Abenomics, when I was fooled by his talk about that third arrow of reforms, which eventually never came.

And then Abe started throwing money around willy nilly, so I dumped my Japan investments.

Kishida needs to make some bold pro-growth reforms if he wants investment to come. Investors only pay tax in the first place if their investments grow. But if investments aren’t going to grow, the tax rate on zero growth is just irrelevant. Lower tax is better to be sure, but there is more to getting Japan growing than just tax breaks. I’m talking regulatory reform.

Not just speculators and those who can afford to lose, but millions of others whose wealth is tied up in cratering stocks are staring down the barrel.

No they aren’t. Give it 5, 10, 20 years and stocks will be up on where they are today, most probably.

Index funds aren’t going to save you when all the indexes are cratering at the same time.

When indexes are down, it means you can buy more, more cheaply. If one is in it for the long term, it’s not a bad thing at all.

To take one example; the NASDAQ is off 25% this year.

And where was it 25 years ago?

After the 1929 crash, the Dow didn’t recover for a generation.

Ok, fair point - it’s a good idea to have a bit more diversification (some raw commodities exposure, etc). But even if stocks did stay down for a long period, continuing to invest money at regular intervals will still give decent results.

That’s a luxury however which many, especially those facing margin calls,

Margin calls…. How many small time index investors are facing margin calls? Margin calls are for leveraged, speculative types of financial instruments.

No chance are that if one just owns an index fund outright.

Long term investors in diversified assets should absolutely not sell at times like these, beyond a rebalance once a year maybe.

0 ( +1 / -1 )

If they want investment in Japan, they should look at the high individual taxation which makes is unattractive for high caliber individuals to come here to work.

1 ( +1 / -0 )

@fxgai

I think the idea is expand it from "small cookies" into a bigger pie, like lifting the ceiling and extending the tax-exemption period.

I am also maxing out my IDECO, so with the NISA that's around 120,000 yen a month of tax free contributions, which satisfies my needs.

The problem is the value of the yen, which means you're getting a smaller volume of US-priced securities than before if you're using your yen income for investment. I like J-Reits these days: Japan's low interest rates mean higher returns on real estate and they are priced in yen.

1 ( +1 / -0 )

I gather you are right Jeff.

Of course if they expand the tax free investments you know that there will be howls from some quarters of evil neoliberalism with tax cuts for the rich.

I have maxed out my NISA and iDeCo, and invested much more in my taxable accounts - all in overseas assets though. I don’t need a tax break to be honest… 20% cap gains is acceptable.

To invest in Japan specifically, I want to see a more comprehensive growth strategy.

1 ( +1 / -0 )

Investing in Japan LOL. I I had kept my liquid assets in Japan during the last year. I would have lost a good chunk of my net worth just to the yen's depreciation against the US dollar.

Never ever invest in this country, use it to make it money (I think it is extremely easy to make Japanese people to part ways with their money and put it in you own pocket) then send your money to offshore accounts.

1 ( +1 / -0 )

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