Japan fund managers increase stock exposure in December: poll

[TOKYO] Japanese fund managers increased their overall exposure to stocks in their model portfolios in December while reducing bond holdings, a Reuters poll showed.

Respondents on average allocated 49.7 per cent of their portfolios to equities in December, compared with 37.7 per cent in November.

The broader equity market has enjoyed a boon in December, supported by continuing global economic growth, upbeat corporate earnings and likelihood of the Federal Reserve sticking to a gradual pace of interest rate increases.

The respondents lifted their North American stock holdings to 35.5 per cent in December from 30.5 per cent in November. Wall Street indexes reached record highs in December on hopes that US tax cuts would stimulate the economy.

They increased their Japanese stock exposure to 48.8 per cent in December from 46.3 per cent in November.

"The equity market looks to remain on a steady footing, with domestic manufacturers leading the way by posting large profits this period," said Yuichi Kodama, chief economist at Meiji Yasuda Insurance.

The respondents increased their holdings in Asia excluding Japan equities to 14.2 per cent from 6.7 per cent while reducing eurozone stock exposure to 0.8 per cent from 8.3 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan has gained 5.5 per cent so far this quarter, while the pan-European STOXX 600 has risen 2.5 per cent, having lost some momentum after peaking at a two-year high early in November.

The fund managers reduced their overall bond holdings to 42.9 per cent in December from 56.9 percent in November.

They cut their North American bond exposure to 19.7 per cent in December from 33.0 per cent in November. They reduced Japan bonds to 26.6 per cent from 36.6 per cent and trimmed eurozone bond exposure to 13.8 per cent from 22.8 per cent.

The survey of five Japan-based fund managers was conducted between Dec. 14 and 19.

REUTERS