Survey Reveals Dwindling Optimism for Abenomics Among Fund Managers

Jun 13 2016 | 6:27pm ET

A new survey from data provider Eurekahedge and the Alternative Investment Management Association (AIMA) reveals the vast majority of investors with mandates in Japan have lost their enthusiasm for the country’s Abenomics.

Only 16% of the poll’s respondents consider the economic policies introduced by Prime Minister Shinzo Abe, collectively referred to as “Abenomics”, a success. The tally is a shadow of the 72% that felt that way only a year ago. 

Nearly three quarters, however, consider Abenomics to be a “partial success,” while 79% expect the Bank of Japan to press interest rates deeper into negative territory and nearly all – 90% - feel additional quantitative easing is on the way.

Economically, the outlook is not very rosy, the survey found. Only 40% of respondents feel Japan’s economy will grow this year, down from a whopping 93% a year ago, and more than half (51%) expect the economy to contract. 

Worryingly for supporters of Abenomics, which was instituted primarily to combat deflation, only 6% think the BOJ will hit its stated 2% inflation target.  

Contrarians take note: the survey also revealed a deep bearishness among investors, with 39% indicating a high probability a major 2008-like financial crisis will occur this year. Meanwhile, 55% expect the dollar to be trading for 110 yen or more by the end of the year.

This was the third year of the joint Eurekahedge/AIMA survey, according to a statement.  It took place between February and May 2016 and was aimed at gauging important insights into market sentiment, investment trends and key regulatory changes facing the Asian asset management industry, with a particular emphasis on the outlook for Japan.

Eurekahedge tracks asset flows, hedge fund performance and regional key trends across the hedge fund universe. The firm's database tracks more than 130 data points on more than 24,000 alternative funds.

AIMA is a global alternative investment industry association with 1,600+ corporate members in more than 50 countries. It is the co-founder of the well-known Chartered Alternative Investment Manager designation, and its manager members collectively manage more than $1.5 trillion in assets worldwide. 

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