Wei Dai said
>I do not understand why Japanese savers do not invest more of their money
>outside of Japan...
>It just seems like a win-win solution, yet it is not adopted nor even
Because the Japanese government made it illegal in order to provide cheap internal investment capital (hence they were able to do things that no western company paying 10% interest could dream of. this also caused the property bubble which lead to down town Tokyo being valued more highly than most of California put together.
Now they no longer need the investment capital and could valuably shift the policy to one of external investment, but it is to late to sell those Yen for their 1980s price.
PS: this is not as simple as i have made seem: there are many biollions of dollars worth of Japanese Yen-backed investments in the West, just not enough to pay wages for two hundred million septuagenarians. ;-(