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Paul Chesson, head of Japanese equities and lead manager of the £146m Japan fund, said he was less cautious towards large-cap equities than he had been for some time.

"This is primarily because some of Japan's best listed businesses are now buyable again, in my opinion. A number of blue-chip stocks have reached very attractive valuation levels," he said.

Mr Chesson admitted he was still cautious about the economic outlook for Japan, as it is highly dependent on exports and could be hit by declining global growth. China's support for Japanese exports could also be hurt by inflationary pressures, he warned.

Added to this, Mr Chesson said Japan's labour market was experiencing "gradual deterioration", with consumer confidence at four-year lows.

"The domestic economy is certainly not in particularly good shape at the moment, and we do not believe this will change materially in the next 12 months," he said.

Despite this, the manager said he was confident the number of companies tipped for double-digit returns this year had grown significantly.

Given the continuation of the cyclical downturn, Mr Chesson said he was shunning cyclical stocks, but finding emerging value in some of Japan's blue-chip stocks.

He cited electronic component giant Murata Manufacturing and car firms Toyota, Honda and Nissan as companies which were well positioned to offer value.

"Some of these companies have had a more chequered history this decade, partly because many of them got caught up in the technology bubble and have been de-rating from overvalued positions ever since," said the manager.