July 31, 2018 / 3:34 AM / 8 months ago

POLL-Japan fund managers slightly raise stock exposure in July

* For poll data click reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/asset-allocation-polls

TOKYO, July 31 (Reuters) - Japanese fund managers increased their overall exposure to stocks in July but at a subdued pace, during a month when many global equity markets were buoyant but experienced volatility amid trade conflict concerns.

Respondents on average allocated 38.7 percent of their model portfolios to stocks in July, from 38.5 percent in June.

The respondents raised their North American stock exposure to 28.7 percent in July from 28.6 percent in June and kept their euro zone stock holdings unchanged at 13.2 percent.

They reduced Japanese stocks to 43.7 percent in July from 48.9 percent in June.

Japan’s Nikkei rose to a 27-year peak in January. But it has lost steam since and was roughly flat so far in 2018, underperforming MSCI’s gauge of global stocks, which has risen about 1.4 percent during the same period.

“Japan stocks will remain at relatively high levels, supported by steady corporate results amid firmness in both the domestic and global economies,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.

“But it is difficult to see domestic stocks going any higher while concerns towards global trade frictions and a potential slowdown by the Chinese economy linger.”

The respondents increased holdings of emerging Europe stocks to 7.1 percent in July from 0.4 percent in June.

Stock markets in countries such as Poland and the Czech Republic reached two-month highs this month backed by robust economic growth.

While MSCI’s emerging Europe index was effectively flat in July, it outperformed the broader MSCI emerging equities index, which has declined more than 5 percent this month.

The fund managers nudged up their overall bond holdings in July to 55.1 percent from 55.0 percent in June.

They slightly reduced their Japanese bond holdings to 42.5 percent in July from 42.6 percent in June, and raised North American bond exposure to 31.0 percent from 30.9 percent. The fund managers left euro zone bond holdings unchanged at 21.1 percent. (Reporting by the Tokyo markets team; Editing by Gopakumar Warrier)

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