Japanese mutual funds are headed for record declines this year as assets across the board have suffered losses from a combination of a global recession, plummeting interest rates and a surging yen.

Funds lost approximately $313 billion through the end of November—about 35% lower than the end of 2007, according to the country's Investment Trusts Association. This drop is even steeper than Japan's asset burst of 1990, when prices fell 22%.

“I’ve never seen a year like this; all assets were hit, not just stocks, Takeshi Tamura, a mutual fund industry veteran of 50 years and auditor at Gomez Consulting Co. in Tokyo, told Bloomberg. “There is no safe haven.”

Stock and bond assets have both plummeted this year. The MSCI World Index and Japan's Topix Index were down 43% this year, the yen soared to a 13-year high and the Bank of Japan cut rates from 0.5% to 0.1%.

Domestic equity funds fell 44% this year, overseas stocks fell 55%, foreign bond funds fell 23% and domestic bond funds fell 1.8%, according to Morningstar Japan K.K.

Disturbing world events and global market turmoil in 2008 have caused many managers such as Nomura Asset Management Co., Nikko Asset Management Co. and Daiwa Asset Management Co. to halt the launch of new emerging market funds. “Investment companies are in no condition to offer new products,” said Satoshi Yuzaki, a section manager at Takagi Securities Co. in Tokyo.

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