Sentiment on Japan Gets Worse: Merrill Lynch

London, Sept. 14 (Jiji Press)--Faith in the Japanese market took a
further knock in September, a Merrill Lynch Fund Managers Survey showed
Tuesday.
A net 32 pct of respondents said they are underweight Japanese
equities, compared with a net 11 pct in July, and a net 20 pct said Japan
was the region they would most like to underweight, the survey showed.
An unprecedented net 72 pct believe that the yen is overvalued, a
number which has been steadily increasing from the net 48 pct of June's
survey.
Explaining the pessimism, Gary Baker, head of European equity
strategy at BofA Merrill Lynch Global Research, pointed to a dearth of
reassuring news coming out of Japan.
"Unless there is that stream of good news coming through, Japan is
unable to sustain the levels of foreign and domestic interest," he said.
Baker blamed policy decisions for investors' lack of confidence.
"The fear of deflation is back and I think it's still all rooted in
that suspicion that you've got paralysis or disagreement at the government
level. Monetary policy is far too tight for the situation that Japan is
faced with."
Elsewhere the survey showed investors are evenly split on whether
the global economy will improve over the next year, and that they remain
risk averse.
One area of optimism, however, was the Chinese economy. A net 11
pct of investors now expect stronger growth over the next year, up sharply
from the recent bearish stance towards China's growth.
A total of 215 fund managers participated in the global survey,
conducted from Sept. 2 to last Thursday.