Vontobel cuts Japanese equity exposure

Following more than three years of overweight exposure, the investment committee of Swiss Vontobel Asset Management has now downgraded Japanese equities to neutral, reflecting its increasingly bearish outlook on the asset class.

The decision to cut exposure is partly motivated by the Bank of Japan’s announcement that it will not introduce further monetary easing measures, which, according to the Vontobel Investment Committee, results in lower profit forecasts for Japanese businesses.

The Investment Committee also anticipates that the persistently high exchange rate of the Yen will put further pressure on Japanese exports while it predicts that inflation will continue to remain low.

Consequently, Vontobel is set to reduce its exposure to euro, US dollar and CHF denominated Japanese stocks by 2% within its model portfolio, with the income from the sale to be held in cash. The remainder of its Japanese equity holdings is not currency hedged.

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