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TOKYO, March 31 Japanese fund managers increased
their exposure to equities in March but at a pedestrian pace
amid concerns the "Trump trade" could be losing steam.
The survey of five Japan-based fund managers conducted
between March 21 and 27 showed respondents on average wanted to
allocate 38.7 percent of their model portfolios to stocks in
March, from 38.5 percent in February.
Within stocks, the respondents kept North American stock
exposure unchanged at 28.0 percent in March while reducing
Japanese equities to 43.8 percent from 46.1 percent in February.
They cut euro zone stocks to 8.3 percent from 11.0 percent and
kept Asian equities steady at 6.7 percent.
The Dow reached a record high at the start of March
but slumped to a six-week low this week as U.S. President Donald
Trump's failure to push through a key healthcare bill raised
questions about his administration's ability to enact fiscal
stimulus measures. Japan's Nikkei has also pulled back
sharply from 15-month highs scaled early this month.
Much of Wall Street's rally since the November election has
been driven by expectations of a boost to the economy from
Trump's promises to cut taxes, ease financial regulation and
lift infrastructure spending.
"Doubts towards the Trump administration's ability to push
through policy steps are unlikely to clear easily and U.S.
equities are expected to remain in an adjustment phase for a
while," Yuichi Kodama, chief economist at Meiji Yasuda
"But equities could enjoy another run higher towards the
summer as hopes for Trump-initiated fiscal policy steps are
likely to be rekindled by then."
The respondents raised their overall bond exposure by a
miniscule amount, increasing it to 55.1 percent in March from
55.0 percent in February.
They raised North American bonds to 35.1 percent from 28.4
percent in February amid a significant advance this month by
U.S. debt. Treasuries have gained steadily in price since the
middle of the month, when the Federal Reserve hiked interest
rates but did not meet heightened expectations for an aggressive
policy tightening profile over the rest of the year.
The respondents kept their Japanese bond exposure unchanged
at 38.4 percent in March while trimming euro zone debt to 16.8
percent from 18.5 percent.
(Reporting by Shinichi Saoshiro)