This is almost four times the Pan-European average. At the same time, none are planning to decrease allocation. Moreover, Zurich is the only financial centre in Europe where Japanese equities are more popular than both US and European equities. Fund buyers in the Swiss financial capital proved confident that Prime Minister Shinzo Abe’s three arrow policy will be successful. Although a structural reform process has not really taken off and Abe’s stimulatory policies have not spurred any wage growth as of yet, all fund selectors who voiced an opinion about Japan were positive about the prospects for the country.
They voiced strong confidence in both Abe and the central bank being committed to reviving Japan’s economy and moving out of deflation. Furthermore, they mentioned the strong export position of Japanese companies and their solid financial position as key incentives to step up allocation to local equities. The contrast with Geneva is huge. In the second financial hub in Switzerland, Japan bulls are nowhere to be seen (see chart on the right).