The asset-backed security market in Japan is starting to catch fire.

The assortment of auto loans, mortgages, and lease receivables recently repackaged as securities is reminiscent of the explosive-growth years of the early 1990s for asset-backed securities in the United States, analysts said.

In the first six months of this year alone, asset-backed issuance placed publicly in Japan shot up to roughly $15.5 billion, about 80% more than a year earlier, said a new study by Moody's Investors Service.

Japan's Ministry of International Trade and Industry this month put the total for the fiscal year that ended March 31 at nearly $33.5 billion.

Though that is just a fraction of the roughly $230 billion of issuance expected this year in the United States, and well below the $55 billion forecast for Europe, Japan's market is growing quickly-faster than the U.S. market expanded in its infancy, said John Speaks, head of structured finance at Moody's.

"The U.S. market took around three years to reach the point that it has taken only two years to reach here in Japan," Mr. Speaks said.

Growth may slow this year because of year-2000 computer worries, but an added $10 billion to $12 billion of issuance is expected by yearend.

The burgeoning market for asset-backed securities is a sign of the times in Japan: With bank lending on the decline, companies and financial institutions are starting to explore ways to wean themselves from reliance on bank credit. Those firms are turning to the asset-backed market for their capital lifeblood.

Legal changes have made it far easier for companies to repackage assets as bonds, generating quick cash and providing a way for those companies to lift assets off their balance sheets.

Investors are showing a healthy appetite. Against the backdrop of low domestic interest rates, many have struggled to squeeze profits out of their investments. Life insurers have been joined by major Japanese commercial banks, regional banks, and credit unions, underwriters said.

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