Ageing Japan still a good investment

By Kevin Plumberg

TOKYO (Reuters) - Has the sun set on Japan as the rest of Asia becomes the sole source of growth in the global economy?

The country's economic situation is indeed dire.

Nevertheless, bankers and investors at the Reuters Japan Investment Summit said the country will remain relevant due to its growing financial ties with other countries in the region, its technological prowess, vast pool of untapped savings and reputation for stability, especially in the midst of the current economic crisis.

The world's second-largest economy is expected to shrink 3.5 percent this year, one of the poorest performing economies in the region, and it will be the biggest laggard in Asia next year, according to Reuters polling.

The country's population is likely to shrink by a third within 50 years while all of Asia's will grow by a quarter, United Nations projections show.

No one doubted these significant challenges, but they still see value and opportunity in Japan.

"Compared with where Japan was in the past, I think Japan will find itself in a weaker position. But does that impact our investment activities? Not necessarily so," said Hiroyuki Arita, president and representative director of the Japanese unit of BlackRock Inc, one of the biggest asset managers in the world.

"If you look at Japan, we have a very stable society. From the viewpoint of overseas investors, I think Japan is an attractive investment opportunity," said Arita, who oversees about $51 billion in assets for Japanese investors.