US equities: Although the upside looks heavy due to the rise in long-term interest rates, a major adjustment has not yet occurred. While there is caution regarding the reduction in liquidity, it is believed that a significant correction can be avoided if the rise in long-term interest rates stays at the current level and the view of the economy not entering a recession is maintained.
Japanese equities: The buying momentum from foreign investors has subsided. However, there is a possibility that the disclosure of specific initiatives by companies in response to the Tokyo Stock Exchange's request will progress, which could once again strengthen preference for Japanese equities.
Written by Hitoshi Asaoka, Senior Strategist , Asset Management One Co., Ltd