Natixis Investment Managers has increased its allocation to Japanese equities while reducing exposure to US stocks, arguing that Japan’s economic growth momentum and monetary and fiscal policies are more supportive of equities. The shift came Monday, one day before Japan’s 10-year government bond yield reached 3% for the first time this century. The asset manager, which oversees about $1.5 trillion globally, had previously considered that yield level a potential pain threshold for stocks. Natixis strategist Mabrouk Chetouane said higher inflation is boosting corporate revenues and earnings, an effect he said markets are already pricing in. The firm remains underexposed to global bond markets because longer-dated maturities have performed negatively. Strategist Romain Aumond said Japan’s recent rise in real interest rates, meaning rates adjusted for inflation, reflects stronger growth momentum and supports a larger allocation to Japanese equities. Bank of Japan Governor Kazuo Ueda has indicated that a rate increase is likely at the board’s meeting later this month, while overnight index swaps, contracts used to price expected interest rates, fully reflect that possibility. Supported by indicators including wage growth, Natixis sees further room for Japanese stocks to perform positively in 2026 and 2027.