UPDATE 1-Japan retail fund value edges up to 8-month high

* Value up 3.7 pct in 2010 after jumping 17.7 pct in 2009

* Toushin see net inflow for 21 straight months

* Fund of funds value tops 20 trln yen for first since 2007
(Adds comment, table)

TOKYO, Jan 17 (Reuters) - The value of investment trust
funds targeting Japanese retail investors edged up to an
eight-month high in December as strength in global shares
prompted solid inflows, an industry body said on Monday.

Still, the yen's rise against the dollar and the euro during
the month hurt the overall performance, with the value rising
only 0.9 percent, or 32.1 billion yen, to 63.7 trillion yen
($768 billion) in December from the previous month, the
Investment Trusts Association of Japan said.

Market participants closely watch the market for these
funds, known as toushin, as it is larger than the economies of
nations such as Turkey and Indonesia.

"The rise of the yen generally hurt the performance (of the
funds in December), limiting gains in value," Fumio Inui, the
association's vice president, told a news conference.

The yen climbed 3 percent against the dollar JPY= in
December, cutting into the value of investment trust funds
invested in foreign equities and bonds.

Meanwhile, solid gains in share prices helped lift the
overall value of toushin, with the broader Topix index .TOPX
climbing 4.4 percent and the key Nikkei average .N225
advancing 2.9 percent.

On an annual basis, the value rose 3.7 percent in 2010 after
jumping 17.7 percent in 2009.

"The value has edged higher on an annual basis, but I have
to say that the market was far more volatile throughout the year
than I had expected, with factors such as the European debt
crisis sharply driving markets," Inui said.

"The outlook for this year is unclear, although I feel that
the overall trend of investors shifting into investments from
deposits will continue," he said.

INFLOWS

The toushin market has seen net inflows for 21 consecutive
months as retail investors seek higher returns and look to
diversify their portfolios into financial products from
low-yielding bank and postal deposits.

Net inflows from retail investors climbed 4.4 percent to
536.6 billion yen in December from the previous month.

Net inflows in 2010 doubled to 6 trillion yen as investors
shifted part of their savings into funds of hedge funds and
other overseas mutual funds.

Steady inflows into funds of hedge funds by retail investors
pushed their value beyond 20 trillion yen in December for the
first time since December 2007.

The market has seen net inflows for seven years in a row.

Following is a breakdown of the December data:

Net money flow (in yen):

Dec Nov

Overall: +536.6 bln +513.8 bln

Stocks: +354.2 bln +305.2 bln

Bonds: +182.4 bln +208.6 bln

Value in public placed toushin (in yen):

Dec Nov mth/mth

Overall: 63.72 trln 63.15 trln +0.9%

Stocks: 52.46 trln 52.08 trln +0.7%

Bonds: 11.26 trln 11.07 trln +1.6%

Value of privately placed toushin (in yen):

Dec Nov mth/mth

Overall: 30.63 trln 30.29 trln +1.1%

Stocks: 29.91 trln 29.57 trln +1.1%

Bonds: 714.5 bln 717.3 bln -0.4%

Dec Nov mth/mth

Value of ETFs: 2.61 trln 2.52 trln +3.4%

Assets in foreign currencies (in yen):

Dec Nov mth/mth

Overall: 27.20 trln 27.59 trln -1.4%

Stock: 5.43 trln 5.57 trln -2.5%

Bond: 15.97 trln 16.37 trln -2.4%

Others: 5.81 trln 5.66 trln +2.7%
($1=82.95 yen)
(Reporting by Chikafumi Hodo; Editing by Joseph Radford)