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Fidelity Jap.OTC (26GU)

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Monday 20 December, 1999

Fidelity Jap.OTC

Final Results

Fidelity Japan OTC&Regional Mkts Fd
20 December 1999

Preliminary Announcement of Unaudited Results
for the year ended 30 September 1999


Your Company's last year in business has ended on an unexpectedly high note,
with the most remarkable recovery in the net asset value.  Having fallen to
just $4.05 a year ago, the net asset value per share finished the year 335% up
at $17.63.  Indeed, the performance has continued into the next two months,
with the NAV reaching $23 at the end of November.

These excellent results can be attributed to two fundamental factors: the
remarkable recovery of Japan's OTC stockmarket and Fidelity's outstanding
investment management.

The nine years of the Company's history have coincided with one of the world's
worst and longest bear markets of this century.  The OTC stockmarket peaked at
4,149 on 7 September 1990, shortly after our launch in June 1990.  Eight years
later, at the end of our previous year (30 September 1998, it had fallen by no
less than 84% to 660.  Then, in the space of 12 months, the index recovered by
196% to 1,954.  To add to this, the yen, benefiting from the better perception
of Japan's prospects, rose 28% against the dollar, resulting in a 279%
increase in the OTC index, expressed in dollars.  While your Directors have
felt encouraged by the extent of change in Japan for some time and therefore
the prospects for Japanese companies (particularly smaller ones), we certainly
didn't anticipate quite such a vigorous recovering in the OTC stockmarket.

The Investment Manager's Report in the Annual Report goes into some detail
about the events, both economic and stockmarket, which unfolded last year. 
Suffice it to say that the realisation that not only was Japan not 'going
bust' but also that change (particularly in the banking sector) was for real,
produced a whiplash effect on a very oversold OTC stockmarket.  Hence the
large share price increases.

However, the recovery in Fidelity Japan OTC's net asset value has been even
more remarkable and this is attributable to Fidelity's investment management
and in particular to Mr Kenichi Mizushita's skilful portfolio management. 
Fidelity have committed considerable resources to 'small cap' research and
have an excellent 'small cap' team, of which he is part.  What is even more
remarkable is that his management has been good in both bear and bull phases. 
On behalf of shareholders, I would like to thank him and Fidelity for their
contribution to these results and in particular for the fact that the net
asset value is more than double that at launch --- not bad when you consider
that the OTC index is still down 11% over the same period.  Shareholders at
launch are now making real (as opposed to relative) money, at last!

Launch 26 June 1990 to 30 November 1999
NAV ($23)        +130%
OTC Index ($)     -11%

Proposals for the future
In my statement last year, I commented that we had begun the process of
producing proposals for the Company's future.  We have now produced them and
they have been sent to you together with the report and accounts.  

In considering what would be the best way forward, the Directors were
concerned that shareholders should have the choice between continuing with the
Company, its investment policy and its portfolio manager and a cash
alternative close to net asset value.

While the Directors believed that continuing with the Company (with added
powers to gear and buy back shares) was the most attractive way forward for
those wishing to continue their investment, it did not prove to be a practical
proposition.  During the course of the summer, approximately 40% of the shares
fell into the hands of arbitrageurs, who were not interested in the Company's
investment goals, only in profiting from closing the discount at which the
shares sell to their net asset value.

Given that the shares have continued to sell at a surprisingly large discount
(considering the excellent performance) and that so many shareholders would
clearly seek the cash alternative, the Directors accepted their Advisers'
recommendation that an open ended continuation vehicle would be the most
practical investment for those wishing to continue with their investment.  The
Directors are therefore recommending to shareholders that they approve the
proposals to be put to them at the Extraordinary Meetings to be held on 31
January 2000 and 10 March 2000.

In considering the future of the Company, the Directors spent much time
considering the prospects for Japan's economy, stockmarkets and smaller
companies.  It is incumbent upon them to be satisfied that shareholders have
good prospects for future capital gains, especially after the large share
price increases in the past year. 

I can report that they are 'bullish' about those prospects - indeed even
excited about them given the considerable and broadly based change that is
happening to 'Japan Inc'.  After so long a bear market, the pent up forces of
change will last for many years.  There is the real prospect that Japanese
companies in a stronger economy, restructuring themselves, could report good
profits growth for many years to come --- just as happened in America in the
1990s following their banking crisis.  This would be very good for most
Japanese companies' share prices - and particularly so for those smaller
companies representing 'New Japan', in which we tent to invest.

The Directors recommend to those shareholders interested in long-term
investment (as opposed to short-term speculation) that they accept the
Fidelity Funds Emerging Japan Fund alternative and retain the same investment
policy and the same Fund Manager.  They believe those shareholders will be
well rewarded over the longer term.

Alex Hammond-Chambers

Enquiries : Barbara Powley - Fidelity Investments International - 01737 836882

as at 30 September 1999 and 1998

                                                       1999             1998
                                                        US$              US$
                                                       000s             000s
Investment in securities at market value
  (average cost $37,470,000, 1998 : 29,591,000      102,364           23,903
Cash in United States Dollars                            19               19
Cash in Japanese Yen                                  3,637              655
Receivables on investments sold                       1,861                6
Other receivables                                        49               41

Total assets                                        107,930           24,624

Payables for investments purchased                    1,633              133
Management fees payable                                 417              112
Other payables and accrued expenses                      96               50

Total liabilities                                     2,146              295

Net assets at market value                          105,784           24,329

Net assets
Common stock                                             60               60
Additional paid-in capital                           59,940           59,940
Accumulated net investment loss                      (5,589)          (4,587)
Accumulated undistributed net realised (loss)/gain
  on investments                                    (17,116)         (28,627)
Accumulated foreign exchange translation gain         3,595            3,151
Unrealised appreciation/(depreciation) 
  of investments                                     64,894           (5,608)

Net assets at market value                          105,784           24,329

Net asset value per share                            $17.63            $4.05

for the years ended 30 September 1999 and 1998
                                                       1999             1998
                                                        US$              US$
                                                       000s             000s

Investment Income (net of withholding taxes)
Dividends                                               192              223
Interest and other income                                 2                1
Management fees                                       1,005              481
Directors' fees and expenses                             75               74
Custodian fees                                           54               22
Legal fees and other costs                               19                6
Audit fees                                               17               21
Secretarial and registration fees                        15               15
Reports to shareholders                                  10               13
Insurance                                                 1                1

Net investment loss                                  (1,002)            (409)

Realised and unrealised gain/(loss)
  on investment transactions and 
  foreign exchange translation
Net realised gain/(loss) on transactions
  in listed securities                               11,511          (16,259)
Foreign exchange translation gain/(loss)                444             (125)
Net increase in unrealised appreciation 
  of investments                                     70,502            8,742

Net gain/(loss) on investment transactions
and foreign exchange translation                     82,457           (7,642)

Net increase/(decrease) in net assets resulting
from operations                                      81,455           (8,051)

for the years ended 30 September 1999 and 1998

                                                       1999             1998
                                                        US$              US$
                                                       000s             000s
Change in net assets
Net investment loss                                  (1,002)            (409)
Net realised gain/(loss) on  
  investment transactions                            11,511          (16,259)
Foreign exchange translation gain/(loss)                444             (125)
Net increase in unrealised appreciation
   of investments                                    70,502            8,742

Increase/(decrease) in net assets resulting
  from operations                                    81,455           (8,051)
Net assets at beginning of the year                  24,329           32,380

Net assets at end of year                           105,784           24,329

The above statements have been prepared on the basis of the accounting
policies as set out in the most recently published set of annual financial

The figures for the year to 30 September 1998 have been extracted from the
accounts for the period ended 30 September 1998 and on which the Auditors gave
an unqualified report.

The annual report and accounts will be posted to shareholders by no later than
20 December 1999.


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