Japan fund managers grow equity stakes, but not at home: poll

Wed Nov 28, 2012 10:36pm EST
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By Hideyuki Sano

TOKYO (Reuters) - Japanese fund managers slightly increased their asset allocations to shares on the prospect of more monetary easing in the developed world and a pickup in Chinese economy, a Reuters poll showed.

At the same time, however, they trimmed their weighting on Japanese shares to seven-month low as they viewed Tokyo shares' strong performance this month as driven by unrealistic hopes of more money-printing in Japan after next month's election.

A survey of 10 Japan-based fund managers, polled between November 15 and 21, also showed they trimmed their overall bond allocation for two months in a row after notching it up to a record high in September.

"Monetary easing in the United States and Europe should help to curtail various downside tail risks. Chinese macroeconomic data is improving and the world's market players now recognize pressure on the Bank of Japan to ease its policy after the election," said a fund manager at a Japanese asset management firm.

"These are all positive factors for stocks. The market should gradually edge higher," he added.

As risk tolerance crept up, allocation to equities reached 42.0 percent from 41.2 percent in October, although it still fell short of last year's 44.4 percent average.

Bond allocations fell for two months in a row to 51.4 percent from 52.2 percent last month and the record high of 53.3 percent in September.

During the survey period, world stock markets rose on upbeat U.S. economic data as well as optimism U.S. lawmakers would clinch a deal to mitigate the "fiscal cliff" -- $600 billion tax hikes and spending cuts due to kick in next year.   Continued...

A man holds Japanese 10,000 Yen ($121) bank notes in front of a bank in Tokyo November 22, 2012. REUTERS/Kim Kyung-Hoon