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Friday, 15 May 1970

Mr BURY (WENTWORTH, NEW SOUTH WALES) (Treasurer) - Japan's expected very large surplus on international account in the near future has given the Japanese policy makers a good deal of scope for new moves. In fact, when I was in Japan recently, I discussed a move which was then being foreshadowed. The Japanese Government was considering allowing for the first time Japanese interests to make portfolio investments on outside stock exchanges. Naturally I expressed the hope that these might include Australian stock exchanges. Since then - I think it was on 1st May - a policy has been announced which will allow Japanese trust companies, which are holders of enormous funds, to invest SI 00m on overseas stock exchanges. The honourable members who have seen the reports on this will have noticed that the stock exchanges specified include New York, London, Paris, Frankfurt, Zurich, maybe one or two more in Europe, Toronto and Sydney. Following this announcement, it is to be hoped that with this extra scope they will invest some of their funds in Australia.

The indication I received from the various bankers and folk I met in Japan in the short space of time that l was there was that most of the funds were likely to go to New York and London. But now that the process has started it is to be hoped that it will expand. Japan may, of course, invest funds in Australia along the same lines as any other overseas investors. We have quite a governmental machine in Japan to open the way for this process. Apart from bodies such as the Japan-Australia Businessmen's Association there are institutions like Partnership Pacific, which is a private banking combination. In Tokyo itself the Department of Trade and Industry has a large establishment. Recently a senior Treasury officer was also established there and he has built up quite a network of connections with the Finance Ministry and various banking and other official institutions.

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