Alex Borer

“Equity markets continue to trade in well defined ranges and we believe that the ranges will hold for some time. An attractive valuation, low investor participation so far and support from monetary policy suggest that an upside breakout is the more probable outcome. We believe that the government bond markets still offer very little price potential. We reduce the bond allocation by a 2 per cent and increase our existing Japanese equity position. Although the currency intervention is unlikely to weaken the yen on an medium-term basis, history shows the equity market rose substantially in the 12 months following the intervention.”