Miton’s Jane cuts Japan exposure as confidence in Abenomics wanes

Japan-Stockmarket-Stock-700x450.jpgMiton’s David Jane has “drastically” reduced his Japanese equities equity exposure, saying it is no longer a high conviction call for the fund.

Jane, manager of the multi-asset fund range at Miton, has made a U-turn on his exposure to Japanese equities amid a cocktail of Abenomics “failures”, Chinese market turmoil, Yen strength and the introduction of negative interest rates.

He says: “The weakness of the Chinese economy and stock market had a significant impact on the Japanese market in the early autumn as Japan’s biggest trading partner is China. This led us to make reductions, particularly in exposed areas.

“Additionally, the Yen has regained its risk-off strengthening pattern; the introduction of negative rates led the Yen to strengthen against most expectations.”

Miton’s multi asset funds now hold a weight similar to the pre-Abe period in an attempt to preserve capital.

He says: “We continued to reduce our exposure into the New Year such that we now have a weight similar to the pre-Abe period. Changing a previously held view must be a feature of our process if we are to preserve capital.”

Jane says Abe’s reform agenda seems to have been more “a political agenda to retain power” rather than to address the country’s economic and political interests.

He says: “Japan for us is much less a macro call on Abenonics but a source of diversification, interesting thematic ideas and a potential source of insight into the effects of ageing on an economy. For these reasons it is for now likely to remain a much smaller position than most of recent history.”