Japan retail fund volume hits 2-yr high in Oct--Lipper

TOKYO, Nov 4 (Reuters) - Japanese retail targeted investment trust funds hit their highest monthly volume in two years in October amid growing investor demand for high-yielding funds, fund research data showed on Wednesday. The initial launch total of these retail mutual funds, also known as "toushin", reached 404.1 billion yen ($4.47 billion) in October -- the highest since November 2007, data from Thomson Reuters fund research firm Lipper showed.

Investor risk appetite is gradually returning as the global economy slowly starts to shake off the effects of the financial crisis, with market participants buying funds that invest in emerging markets and toushin that allow investors to select the currency in which the fund is denominated.

The Brazilian real has been drawing strong interest since these "currency-select" funds were first offered in January.

Sumitomo Mitsui Asset Management's mutual bond funds investing in sovereign and corporate bonds in emerging markets last week drew 189.6 billion yen -- the largest this year for the initial launch of a single series of Japanese mutual bonds. [ID:nT98637]

Japanese individuals, who hold about $15 trillion in personal savings largely parked in low-yielding accounts, are key buyers of toushin and their investment moves are closely watched as they can be a key factor in financial markets.

A separate survey by Nomura Research Institute showed the asset value of the toushin market has been climbing steadily.

The overall value of toushin rose for a ninth straight month to 47.9 trillion yen at by the end of October -- the highest since September last year, the NRI data showed.

But toushin saw net outflows of 183.1 billion yen in October, a big reverse after scoring their highest inflow in nearly two years of 299 billion yen the previous month.

Nomura's data showed an outflow as it only includes fresh toushin in its figures three months after they have been launched. ($1=90.33 yen) (Reporting by Chikafumi Hodo; Editing by Joseph Radford)