Latest news with #foreigninvestors
South China Morning Post
a day ago
- Business
- South China Morning Post
Japan and Singapore show even property safe havens are not problem-free
Two findings stood out in CBRE's survey on Asia's commercial property investment market published last month. The first was that Japan alone accounted for 36 per cent of transaction volumes in the first quarter of this year. The second was that it was easily the most popular market among cross-border investors, with 86 per cent of respondents describing their level of interest in Japan as very strong or fairly strong. These findings underscore the strong appeal of a market that has long been perceived by foreign investors as a safe haven. At a time when the United States – long the safe haven of choice for global investors – has become a source of instability and unpredictability , Japan's political stability, policy predictability and the depth and liquidity of its real estate market have taken on added significance. Persistently low interest rates, the cheap yen , the return of inflation after decades of stagnation and Japan's position as an attractive alternative to China have added to its appeal among investors. Even so, there are signs that Japan has become too appealing. In the commercial property market , the weight of foreign and domestic capital targeting Japanese assets in the past several years has driven down rental yields for institutional grade properties in Tokyo to extremely low levels. Even in Osaka, a relatively illiquid market, prime office and retail yields are lower than in Seoul and Singapore, which are among the most actively traded markets in the Asia-Pacific. Low borrowing costs and higher loan-to-value ratios in Japan allow investors to earn a positive carry, which means the returns from holding an asset exceed its financing costs. However, a narrowing spread, or gap, between rental yields and government bond yields makes Japanese real estate less attractive from a pricing standpoint. Moreover, the cheap yen – down about 38 per cent against the US dollar since early 2021 – has fuelled a boom in overseas tourism . Last year, hotels accounted for 20 per cent of investment activity, up from 5 per cent in 2021, according to JLL data.
Wall Street Journal
4 days ago
- Business
- Wall Street Journal
Global Investors Suddenly Have a New Concern: A U.S. 'Revenge Tax'
President Trump speaks on Wednesday at the White House. An obscure part of his fiscal bill is worrying foreign investors. (Evan Vucci/Associated Press)
Zawya
4 days ago
- Business
- Zawya
Wall Street fears foreign tax in budget bill may reduce allure of US assets
NEW YORK - Wall Street analysts are cautioning that a tax targeting foreign investors in the U.S. budget bill progressing through Congress could end up weighing on demand for U.S. Treasuries and the dollar. The U.S. House of Representatives last week approved a sweeping tax and spending bill that includes the possibility of imposing a progressive tax burden of up to 20% on foreign investors' passive income, such as dividends and royalties. The levy, included in section 899, would be paid by entities or individuals from countries that impose taxes the U.S. considers unfair. If it is also approved by the Senate, it could raise $116 billion in taxes over ten years, according to the Congressional Budget Office. "We see this legislation as creating the scope for the U.S. administration to transform a trade war into a capital war if it so wishes," George Saravelos, head of FX research at Deutsche Bank, said in a note on Thursday, adding the new tax could have an adverse impact on demand for U.S. Treasuries. If passed by the Senate, the rising tax rate on foreigners' investments would come at a time global investors have started to question so-called "U.S. exceptionalism," or its unique ability to outperform other financial markets, amid growing fiscal deficits and a new trade policy based on tariffs. Morgan Stanley said in a note that the new tax would weaken the dollar, as it would reduce the foreign appetite for U.S. assets. Morgan Stanley's strategist Michael Zezas singled out European investors with passive income in the U.S. as particularly vulnerable to the tax. The bank did not provide any estimate for the impact. According to law firm Davis Polk, nations that could be considered 'discriminatory foreign countries' include many that are part of the European Union, as well as India, Brazil, Australia and United Kingdom. The White House did not immediately comment on the impact of the new tax burden. (Reporting by Carolina Mandl, in New York; additional reporting by Elisa Martinucci, in London, and Lewis Krauskopf, in New York; Editing by Megan Davies and Sonali Paul)
Bloomberg
6 days ago
- Business
- Bloomberg
Beware of the Almighty Dollar's Fall
Have you seen the Road Runner cartoon, where the coyote chases the speedy bird only to overshoot the mark and run off the cliff? At first, Wile E. Coyote levitates as if he's still on firm ground, but once the illusion fades, he plummets toward rock bottom. That's the risk with US financial markets as foreign investors withdraw their support. To be sure, a panic isn't the likely outcome here. But as markets become more and more detached from the fundamentals, the risk of a crash is feasible enough to outline why. The first question: which US financial assets are most vulnerable? Two weeks ago, we looked at equities. And last week, we added bonds to the mix. If we're looking at the trigger for a sudden stop, though, we should be more concerned about the US dollar.
Bloomberg
6 days ago
- Business
- Bloomberg
Dollar May Face ‘Major' Drop in 2026, Standard Chartered Says
The risk of a 'major' downturn in the dollar will increase next year if President Donald Trump's policies add to the US debt burden but fail to boost the economy, according to Standard Chartered. US government debt and the amount owed to investors outside the country have increased simultaneously in recent years, the bank said in a research note. That puts the dollar and Treasuries at risk from any loss of confidence among foreign investors as they get a better view of the longer-term impact of increased borrowing.
