Dragon breathes fire on American Eagle. Japanese begin to shift cash out of U.S. investments. Many in Japan are starting to speak of "quitting America," but they are not talking about a rise in anti-American political fervor. Rather, they mean a move away from American investments that is altering global capital flows and helping to weaken the dollar.
The move is seen in decisions of individual investors like Daijo Okudaira, a 66-year-old clerk at a Tokyo consulting company. Like many Japanese, Okudaira had long limited his overseas investments to the relative safety of securities from developed countries, particularly the United States.
Starting late last year, however, Okudaira made drastic changes to his portfolio, putting $50,000 into mutual funds focusing on stocks in China and other emerging economies. He said he had been drawn to these countries because they seemed to hold much brighter growth prospects than the United States.
"People say the engine of the global economy is shifting from the United States to emerging countries," Okudaira said. "Emerging countries have growth and energy that America and Europe lack. They remind me of Japan 40 years ago."
Japan's legions of individual investors like Okudaira have emerged as a global financial force to be reckoned with, directing almost half a trillion dollars of their nation's $14 trillion in personal savings overseas in search of higher returns. Until recently, much of this huge outflow of cash, known as the yen-carry trade, had gone into United States stocks, bonds or currency, propping up the dollar's value.
Now, however, Japanese individuals are diverting more and more of that money away from the United States and the dollar and into higher-yielding global investments, ranging from high-interest Australian government bonds to shares in fast-growing Indian construction companies. Partly this "quitting America" — called beikoku banare in Japanese — reflects an increasing sophistication of Japan's investors, who embraced mutual funds only a decade ago and are still learning to diversify. But it also offers one more sign that the world does not depend as much on the American economy as it once did.
Recent figures on mutual fund purchases suggest this trend has accelerated since August, when subprime problems shook Wall Street — and along with it, faith in the United States economy. Since early August, the dollar has fallen almost 8 percent against the yen, a decline many analysts here say offers another indication of Japan's waning appetite for dollar-denominated investments.
"One lesson of August was the failure of American markets to recover," said Akiyoshi Hirose, head of research at Daiwa Fund Consulting, a research company based in Tokyo specializing in mutual funds. "On the other hand, Asia's emerging countries did recover quickly. So money is flowing out of the United States and Europe and into these newer markets."
In October alone, Japanese individuals pulled 33.9 billion yen, or about $300 million, out of mutual funds that invested solely in North American stocks and bonds, according to Daiwa Fund. In the same month, it said, Japanese individuals put 175.2 billion yen, or $1.6 billion, into funds investing in stocks and bonds in emerging countries.
In the last 12 months, Japanese individuals invested 1.97 trillion yen, or $17.5 billion, into emerging market mutual funds, according to Daiwa Fund, and during the same period, they removed 447 billion yen, or $4 billion, from North America-only mutual funds.
Demand for emerging market funds has gone up so sharply that asset management companies added 48 such funds in the past year, bringing the total number to 183, the company said. Meanwhile, it said, the number of United States-focused funds rose by just 3, to 137.
To be sure, some analysts caution that the popularity of emerging markets may prove to be a fad, especially if stock markets in China or India start falling as quickly as they rose. Analysts also say the dollar's greater familiarity gives it an enduring appeal among many Japanese, who may return once the United States mortgage problems subside.
Some analysts predicted the eventual revival of short-term currency trading between the dollar and the yen, which had been an important support for the dollar's value before August's market turmoil.
"A lot of dollar-buyers are just sidelined now," said Tohru Sasaki, chief exchange strategist in the Tokyo office of JPMorgan Chase Bank. "They'll be back once currency markets settle down."
PCA Asset Management, a Japanese arm of a British firm, said that until last year, its most popular product was a United States bond fund. Now, the company says, 80 percent to 90 percent of the investment money it receives flows into its emerging-market funds, all focused on Asia. To meet demand, the company has added five new Asia-focused mutual funds since January 2006. The most popular, a fund investing in stocks of infrastructure-related companies in India, has grown to $1.4 billion in assets in just one year.
Takashi Ishida, head of investment at PCA Asset, said the emerging-market funds have proved particularly popular with investors in their 50s and 60s, an age group that remembers Japan's period of high growth four decades ago. He said these Japanese now believe they recognize the same sort of heady growth in developing Asian countries like China, India and Vietnam.
"Asian emerging markets appear safe to invest in because they seem familiar to many Japanese," Ishida said.
Many individual investors agree, citing vague impressions of cultural affinity in explaining their optimism in Asian emerging markets. Okiko Ebata, one of a half-dozen individuals gathered on a recent afternoon for an investing seminar in Tokyo, said she had invested in overseas stocks for the first time late last year, choosing a mutual fund that focused on Vietnam. She acknowledged it was a riskier choice than United States or European stocks, but said she felt comfortable.
"I've heard people in Vietnam resemble Japanese," said Ebata, 59, as the rest of the group nodded in agreement. Two others also said they had invested in the last year in mutual funds focused on India or Southeast Asia.
In a separate interview, Okudaira, the clerk, said his China fund had doubled in value in less than a year. But even if Chinese investments cannot keep up such rates of return, he said, he and other Japanese will continue to diversify where they put their savings.

"I now have money invested in America, Europe, as well as in Asia," Okudaira said. "Japanese are learning to how to reduce risk."