Natixis Raises Japan Stocks Allocation, Cuts US Equity Exposure

Natixis Investment Managers, which oversees approximately $1.5 trillion in global assets, has increased its portfolio allocation to Japanese equities while reducing its exposure to US equities. Strategists Mabrouk Chetouane and Romain Aumond highlighted that Japan's domestic economic momentum, wage growth, and supportive policy backdrop provide stronger tailwinds and a superior risk-reward profile relative to the United States. The reallocation took place shortly before Japan's 10-year government bond yield reached 3% for the first time this century. While higher yields were previously considered a potential headwind, Natixis strategists argued that rising real interest rates reflect robust economic expansion and that inflationary pressures are boosting Japanese corporate revenues and earnings. Additionally, the firm views the Bank of Japan's monetary policy normalization as positive for equities, while overnight index swaps fully price in an upcoming interest rate increase. Across global portfolios, Natixis continues to hold an underweight position in government bonds amid rising long-term yields.