The nation's financial regulator is concerned that banks and securities companies are selling complex funds that charge high fees to individuals who may not understand the risks, and it is talking to the firms about whether the sales are appropriate.
Funds that bundle investments in assets from Japanese stocks to U.S. high-yield debt with wagers on currencies are sold by the nation's largest brokerages and banks. Declines of more than 20 percent in emerging-market currencies against the yen in the past year have left owners of so-called double-decker or layered funds with big losses.
Investors are being forced to take more risks to secure returns after unprecedented monetary stimulus by the Bank of Japan to battle deflation sent yields on sovereign bonds below zero. Double-deckers often give monthly dividend payouts. While that's an attractive feature for elderly investors at a time when deposit rates are near zero in one of the fastest-aging nations in the world, the products also carry more risks.