Natixis Shifts Investment Focus to Japan, Reduces US Equity.
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Natixis Shifts Investment Focus to Japan, Reduces US Equity.
- Natixis Investment Managers has increased its allocation to Japanese equities, citing the nation's economic growth momentum and rising government bond yields.
- Strategists Mabrouk Chetouane and Romain Aumond highlighted Japan's supportive monetary and fiscal policies as a key factor in their decision.
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Natixis Investment Managers has announced a strategic shift in its investment portfolio, increasing its allocation to Japanese equities while simultaneously reducing exposure to US equities. This decision, conveyed by strategists Mabrouk Chetouane and Romain Aumond, is based on the expectation that Japan’s economic growth momentum will continue, supported by inflationary pressures that are pushing government bond yields higher.
Japan’s 10-year government bond yields recently reached 3%, marking a 30-year high, reflecting concerns over inflation and sovereign debt levels. This rise in yields is intensifying pressure on the Bank of Japan to consider further interest rate hikes, with analysts anticipating two increases during 2026. Despite some economic weakness, real GDP in Japan grew robustly at 0.5% quarter-on-quarter in the first quarter of 2026, driven by resilient private consumption and investment, and momentum in nominal wage growth. The Japanese government’s debt-to-GDP ratio reached 249% in 2025.
Conversely, Natixis has pared its exposure to US equities. The US economy is projected to see growth rebound to 2.2% in 2026, driven by fiscal and monetary easing. However, inflation is expected to remain above 2%, and fiscal policy subtracted 0.2 percentage points from US GDP growth in the second quarter of 2026. The Federal Reserve’s monetary policy report in July 2026 noted that inflation has risen and remains elevated above its 2% objective.
The strategists at Natixis believe that Japan’s monetary and fiscal policies are more supportive of its economy and stock market compared to those in the US. Japan’s economic momentum is increasingly bolstered by domestic demand, strong wages, recovering consumption, and sustained corporate investment, with underlying inflation remaining above the Bank of Japan’s 2% target. A survey conducted in late 2025 by Natixis also indicated that 76% of institutional investors planned to reduce or maintain allocations to US equities, while 90% intended to increase or maintain allocations to Asia-Pacific stocks.