February 28, 2018 / 3:46 AM / 10 months ago

Japan fund managers increase stock exposure in February - Reuters poll

TOKYO (Reuters) - Japanese fund managers increased their overall exposure to stocks in February while keeping their bond holdings steady, a Reuters poll showed.

A man looks at an electronic stock quotation board outside a brokerage in Tokyo, Japan February 5, 2018. REUTERS/Toru Hanai

Respondents on average allocated 49.0 percent of their model portfolios to equities in February, compared with 43.7 percent in January.

Global equities recorded steep losses early in February as a steady rise in U.S. yields unnerved Wall Street. However, markets have largely bounced back, recouping a large part of their losses.

The Dow Jones Industrial Average, for instance, scaled an all-time high late in January, before falling about 12 percent from the peak in early February. It has since recovered most of those losses.

“We believe the kind of adjustments seen in equities is a phenomenon often seen in markets that have reached very high levels... the key going forward is increasing risk assets while reducing risk from foreign exchange fluctuations,” said a fund manager at a Japanese asset management firm, who declined to be named due to company policy.

The respondents kept their exposure to North American equities mostly unchanged, at 30.0 percent in February compared with 30.3 percent in January, and increased Japanese stock holdings to 54.0 percent from 41.5 percent.

The respondents reduced euro zone stock exposure to 8.0 percent in February from 10.8 percent in January and cut Asia equities excluding Japan to 3.5 percent from 11.7 percent.

The fund managers kept their overall bond holdings nearly steady, trimming their exposure slightly to 48.0 percent in February from 48.3 percent in January.

They reduced their North American bond holdings to 21.6 percent in February from 32.0 percent in January, with Treasury yields climbing to four-year highs this month on the back of a sell-off in U.S. debt.

The respondents increased Japanese bond exposure to 46.8 percent in February from 33.2 percent in January.

Unlike their U.S. peers, Japanese bond yields have been anchored at relatively low levels as the Bank of Japan is expected to stick to an accommodative monetary policy for the foreseeable future.

The survey of five Japan-based fund managers was conducted between Feb. 20 and 23.

Reporting by the Tokyo markets team; Editing by Amrutha Gayathri

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