Optimism about Japanese equities

Global money managers this month became more optimistic about Japanese equities and grew more concerned that accelerating inflation would lead to higher interest rates, a Merrill Lynch & Co survey showed.

A net 37% of the 273 fund managers surveyed said they would like to own more Japanese stocks in the next 12 months than their benchmarks suggest, compared with 32% who said so in March. Japan has the most favourable prospects worldwide for earnings growth, said 38% of the respondents, the highest of any region.

“Japan is very much everyone’s favourite equity market,” said David Bowers, chief global strategist at Merrill Lynch.