TEMPTED by the current market conditions in Japan, the Fleming

Japanese investment trust hopes to raise as much as #250m through an

ambitious conversion share offer.

Around #95m has already been taken up by the big institutions and the

#155m balance will be made available to shareholders and warrant holders

via an offer for subscription.

The move, which will almost double the trust's assets to #550m, is

prompted by a number of reasons, not least the fact that

the shares have been recently

trading at a premium to net asset value.

''This suggests that there is support for an issue of additional

shares and this will allow existing and new investors to increase their

exposure to the Japanese market in a cost-effective manner,'' chairman

Patrick Gifford said.

* The Tokyo stock market in yen terms at the end of last year was half

the level of four years previously.

* Share prices of Japanese manu facturers are considered rela tively

cheap in international terms, with the market price-to- sales ratio of

the industrial sec tor marginally lower than those in the UK and US.

* The official discount rate of 1.75%, the base for interest rates, is

the lowest in 50 years.

* Easier government fiscal poli cies have been accompanied by

stimulatory measures aimed at increasing public spending and improving

consumer confi dence.

This week's sharp rise in the Nikkei index should not alter the

prospects as the base was so low and, in any case, the increase will be

reflected in the performance of the trust, according to the managers.

The issue of 250,000,000 conversion shares at 100p has been structured

to ensure that the assets of existing shareholders are not affected.

Managers also pointed out that the number of new shares has been

deliberately set high to lessen the chance of applications being scaled

down.

''Therefore the offer should not be taken as indicating the number of

conversion shares that are likely to be applied for or issued,'' said

one.

However, the level of interest shown so far could well mean that some

scaling down might be needed after the February 23 application deadline.

On conversion, one new warrant will be issued for every five new

Ordinary shares.

Dealings in the conversion shares should begin on February 28 and

public applications should be for a minimum of 2500 shares.