Japan stock watchers say the fallout from an investigation of Yoshiaki Murakami for market manipulation will be limited.

The Securities and Exchange Surveillance Commission started a probe into the famous investor this week, according to an official at the market watchdog. While companies that Murakami has stakes in have tumbled, Sompo Japan Nipponkoa Asset Management Co. and Daiwa SB Investments Ltd. say the scandal won't affect other equities nor detract from the nation's efforts to overhaul corporate governance.

"There might be some effect on shares that they're investing in, but it won't weigh on the overall market," said Kenji Ueno, a senior investment manager at Sompo Japan Nipponkoa Asset Management in Tokyo, which oversees ¥1.4 trillion ($11.4 billion). "I can't comment on the investigation itself, but at a time when dialogue with investors is being talked about, Murakami is a person of the past. The corporate governance that's being pushed forward now is a little more sophisticated."