The China Banking Regulatory Commission has signed a memorandum with Japan's Financial Services Agency, signalling an expansion of the country's qualified domestic institutional investor (QDII) programme. Japan joins Hong Kong, the UK and Singapore as approved investment markets for Chinese banks.

Under the existing templates with UK and Hong Kong authorities, banks will be allowed to launch funds with allocations to listed equities, fixed income, or registered funds. However, the scheme does not permit investments in hedge funds and other alternative investments at this stage.

The Nikkei 225 index jumped nearly 600 points on the announcement, closing at 13,914 points yesterday (the memorandum was signed last Friday, February 22). Japanese investors are also pouring into the market on rumours that China's sovereign wealth fund, the $200 billion China Investment Corporation (CIC), is planning to acquire a stake in the Tokyo-listed oil & gas developer Inpex Holding...

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