Japanese Investors Favor Fannie Mae's Securities

TOKYO - The Federal National Mortgage Association's chairman, James Johnson, said Japanese investment in his agency's securities was outpacing that in all other dollar-based securities and should hit record levels this year.

Japanese investment in Fannie Mae issue exceeded $11 billion in the first nine months of 1991, and a record number of Japanese investors bought its fixed-income securities, broadening the investor base by 20%, Mr. Johnson told reporters during a visit to Japan.

Mortgage-backed securities were the most popular investment vehicle, and the Japanese bought about $10 billion worth of the instrument in the first nine months of 1991, Mr. Johnson said.

Sales Campaign Pays Off

Since the U.S. government-sponsored corporation began trying to attract Japanese investors seven years ago, the Japanese have bought nearly $12 billion of its long-term debt issues and about $28 billion of mortgage-backed issues.

The growth in Fannie Mae's sales comes despite generally weak Japanese interest in foreign investments. The Japanese bought about $46.44 billion of foreign bonds in the first nine months of this year, up from $35.22 billion for all of 1990 but well below $111.97 billion in all of 1989.

"We expect to see substantial continued growth from Japanese investors in the future," Mr. Johnson said.

Treasuries Lose Favor

He said much of Fannie Mae's gain has been at the expense of Japanese investment in U.S. Treasury securities and corporate debt.

Many new investors in the corporation's securities have been smaller banks outside Tokyo and leasing companies, Mr. Johnson said, though major money-center institutions continue to account for most of buying.

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