Chief investment officer Tom Becket had encouraged the firm’s investment managers to sell down holdings in Japan in May because of fears it was overbought.
But following the sell-off, the discretionary manager began buying back into Japan in June.
The firm’s conviction on Japan has been raised by the victory of prime minister Shinzo Abe’s party in the elections for the Japanese upper house on July 21, which gave the prime minister full control of parliament.
Tim Gregory, head of global equities at Psigma, said the election victory gave a “resounding ‘thumbs up’ to ‘Abenomics’” which will lead to structural reform and “will aid a domestic recovery”.
Mr Gregory said Mr Abe would be keen to please investors with the next leg of his reform programme and he expected an “upside surprise” in the markets.
He said this “could give another bounce to stocks perhaps, possibly pushing them above the recent peaks seen on the Topix and the Nikkei”.
The Nikkei 225 has been trending up very slightly since the election results were announced as the market waits for Mr Abe to reveal his next move.