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Natixis Boosts Japan Equities Amid Global Caution
4 Sep
Summary
- Natixis Investment Managers increased its allocation to Japanese equities.
- The firm favors Japanese stocks over bonds globally for better risk-reward.
- Higher inflation is seen as a positive driver for corporate earnings.
Natixis Investment Managers has boosted its allocation to Japanese equities, anticipating that Japan's economic growth momentum will continue. The strategists highlighted that Japan's monetary and fiscal policies are more favorable to its economy and stock market compared to the US. They believe the forces driving the stock market are stronger in Japan and see equities as offering the best risk-reward globally, given negative performance in bond markets.
The asset manager, overseeing approximately $1.5 trillion, adjusted its weighting recently. This shift aligns with the view that higher inflation can positively impact corporate revenues and earnings. While global bond yields have been rising significantly, with notable increases in US, UK, and Australian markets, Natixis finds the growth momentum in Japan to be a "super signal" for overweighting Japanese equities. The Bank of Japan's potential monetary policy normalization is also viewed as a positive factor.
Recent indications suggest the Bank of Japan may implement a rate hike soon, with market expectations fully pricing in such a move at an upcoming meeting.
