After the recent events at Japan-based Livedoor Co., Japanese investors have been avoiding equities, according to Dow Jones. Equity fund shareholders took more money out of Japan than they put in, overturning a bullish trend.

Yen-dominated funds located oversees were hit the hardest, which proves that Japanese investors, rather than international investors, were in a rush to get their money out, said Brad Durham, a managing director of Boston-based Emerging Portfolio Fund Research.

In the week starting Jan. 18 ending Jan. 25, almost $361 million was pulled out of Japan funds.

Here in the West, the Scudder Japanese Equity Fund had an outflow of about $7 million as a result of the Livedoor probe. The Credit Suisse Japan Equity Fund lost about $150,000.

However, one man's loss is another's gain, as the iShares MSCI Japanese Index ETF made $121 million in new money during the same week.

"We have not changed anything about how we are investing in Japan as a result of Livedoor, and we remain sanguine that the long-term picture for Japan is one where we're happy to continue investing," said Andrew Foster, director of research at Matthews International Capital Management.

Overall, Japanese funds have been faring well in the eyes of investors. Chicago-based fund tracker Lipper reports that the average U.S. mutual fund that invests in Japan was up 33.6% in 2005.

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