i was reading yesterday about the yen and with its decline it is going to make their returns on REIT's decline...why is this?

how does their current currency valuation affect their investments?

So if the yen is weakening relative to the dollar, then it takes more yen to buy the same amount of dollars. Customers use Yen to purchase interest in the REIT funds. The Funds have to convert the Yen into dollars to purchase American REIT interests in the US. If it takes more Yen to buy the same amount of dollars, then the Japanese Funds would have to procure more Yen to sustain the same returns. It sounds like they won't be able to do that, especially with the way they return some of the principle and interest to customers relying on new investment to keep up operations, it sounds a little iffy to me...

thanks for that!
great explanation - makes sense now.

seems like they will be going through a big default soon

gparkis 

thanks for that! great explanation - makes sense now. seems like they will be going through a big default soon

You might find this video interesting. Kyle Bass talking about the possible default of Japan.