Domestic investor sentiment up but global players wary of Japan

JIJI

Sentiment among domestic investors is picking up but global players remain cautious about the prospect of Japan’s economy rebounding, according to a recent Bank of America Merrill Lynch Fund Manager Survey.

The poll, conducted from Nov. 2 to 8 and released Tuesday, showed that a net 18 percent of Japanese investors expect the economy to start recovering over the coming year, compared with a net 30 percent who projected a deterioration in October’s survey.

But the survey also found a net 34 percent of global asset players are so underweight on Japanese equities that it termed it a “historically bearish” position, although the rate fell from a net 38 percent the month before.

A total of 248 panelists managing $695 billion (about ¥55 trillion) worth of assets participated in the November poll.

“Clearly, sentiment toward Japan remains at rock bottom. We see Japan right now as a contrarian buy. Given the uplift in global growth expectations, that is a little surprising,” said John Bilton, European investment strategist at BofA Merrill Lynch Global Research.