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To: Mark Fowler who wrote (79112)	9/30/1999 3:07:00 AM
From: GST	Read Replies (1) \| Respond to of 164684

Thursday September 30, 1:07 am Eastern Time POLL-Japan investors to spurn stocks for cash By Akiko Ishiwata TOKYO, Sept 30 (Reuters) - Japanese financial firms see a shift of funds out of stocks and into cash in October amid growing worries that stocks may be overvalued and about currency volatility, a Reuters survey released on Thursday showed. The monthly Global Asset Allocation survey asked 11 Japan-based financial institutions in last September about their model investment portfolios for October. The average weighting for cash rose to 18.73 percent -- the highest level since October 1995 -- from 13.06 percent in the previous survey while that for stocks fell to 48.49 percent from 53.44 percent. The planned bond weighting also decreased to 32.78 percent from 33.5. ``Although (last Saturday's) Group of Seven statement shared Japan's concern about the yen's rise, actual policy depends on the Bank of Japan and it's too soon to say a yen correction has begun so there is still uncertainty about currencies,' said an analyst at Dowa Kasai Investment Management. ``And if U.S. stocks enter a true consolidation phase, world share prices will do so as well, so we want to avoid risk by reducing the weight of equities,' he added. Investors' appetite for U.S. and Canadian stocks remained fairly stable, however, with a weighting of 40.69 percent against 40.91 in the previous month's survey, but many institutions were wary that prices may be too high. ``In the context of a continued tug-of-war between (U.S.) monetary policy and corporate profit moves, swings in currencies are likely to have a big impact,' said an analyst at SG Yamaichi Asset Management. ``The concern about high share prices remains.' Few institutions, however, expect a sharp fall in U.S. share prices and some expect fresh gains if foreign exchange markets stabilise. Despite worries about the strong yen following the Bank of Japan's refusal to ease monetary policy at its September 21 Policy Board meeting, demand for Japanese stocks is also stable, with institutions' average weighting coming in at 21.88 percent against 21.78 percent in the August survey. ``We see a good chance that the risk of a rise in the yen will recede and of a soft landing for U.S. stocks. If so, there is a good chance that Japanese shares, which fell sharply in late September, will rebound,' said a strategist at Daiwa Research Institute. Despite prospects of economic recovery in Europe, institutions' portfolio weighting for European bonds including Britain rose to 52.42 percent from 51.07, helped by a halt in the euro's decline and the slow tempo of the region's economic recovery. The weighting for North American bonds fell to 37.00 percent from 38.43 percent with some investors citing a possible flight of capital from the United States over the longer term if monetary policy tightens and shares weaken. But with most betting a rate rise is not imminent, most still expect a firm tone in U.S. bonds. The institutions' weighting for Japanese bonds slipped to 8.75 percent from 9.36 percent as expectations of excess supply due to a planned extra budget for the fiscal year to next March jockeyed with the stronger yen and weaker share prices. ``Interest rates will probably rise again because of the rising supply (of government bonds) due to the extra budget, but in the short run, given weak share prices and the strong yen...it is easy to buy yen bonds,' said a strategist at Dowa Kasai Investment.