When asked what they will do with their weighting to Japanese equities over the next six months 75% of delegates said they expect to hold it steady, with only 12.5% saying either they are likely to raise or lower it.
The view among the wealth managers on one of the key developments in Japan, corporate governance reforms, was also positive. Of those questioned, 74% said they expect the reforms to impact shareholder returns within five years, with 26% saying it will take longer than that.
It was not all optimism however. There was some concern among those attending over how much more the Bank of Japan is able to do to stimulate the economy. Some 80% said they believe the recent move to negative rates implies the central bank is running out of options.
On this point, manager of the Invesco Perpetual Japanese Equities fund Tony Roberts sees an upside to monetary policy tools reaching their limits.
“With rates turning negative it may seem the authorities are running out of options but on the fiscal side it will help dramatically and probably lead to a postponement of the sales tax hike next year,” he said.
“There are of course things they can still do but if you define the effectiveness of monetary policy as weakening the Yen, it is getting harder to do that,” added David Townshend, a managing director at Goldman Sachs Asset Management. “On the other hand, there are other things they can do such as fiscal policy, stimulating certain parts of the economy and delaying the sales tax rise.”
However, according to Sherene Ban of JP Morgan Asset Management, the Bank of Japan is not finished yet. “In our view moving to negative rates shows how committed the authorities in Japan are to ending deflation and to achieve their 2% inflation target.”
