JAPAN - Commodities look set to recieve billions of dollars worth of investment from Japanese institutional investors, despite sky-high prices and market uncertainty.
According to recent reports, Japanese investors, responding to low yields in recent years, are looking to move away from their usual conservative investment approach and diversify portfolios that are currently heavily based on bonds and equities.
They are expected to move money into the commodities market, and are said to have already bought a variety of instruments linked to resources such as oil and metals.
However, industry insiders are currently divided as to the future potential of the already-saturated commodities market.
While some have claimed that commodities are reaching the peak of a cycle, Paul Harrison, UK business vice president at PIMCO, said that investor confidence in commodities depended to a great extent on China and India’s race to become superpowers.
He said if you believed China and India would continue to develop at the same speed, using more and more natural resources like oil in the process, then consequently, you beileved that prices could rise even further.
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