Compared to last year and the year before, there has been a shift towards Japanese equity, said Horii, who is based in Tokyo. Rather than worry about foreign exchange, they want to take advantage of the local currency and the strong domestic equity market, said Horii.
At the urging of the stock exchange, Japanese companies have started seriously improving their corporate governance practices and have taken efforts to grow their bottom lines in the mid- to long-term, he observed.
He also noted that while some institutional investors have questioned whether Japanese equities are too expensive at the moment, he believes valuations are fair.
The exchange rate between the dollar and the Japanese yen has had a big impact on the economy, and he believes that the weakening will not continue forever. "It has to stop at some point," he said. "But will the yen return to 100 against the U.S. dollar? That's not feasible."
Instead, he believes 120 yen against the dollar seems like a more reasonable scenario.
Sumitomo Mitsui Trust Asset Management had $617 billion in assets under management as of Dec. 31.
Min-Lan Tan, Singapore-based head of the chief investment office for Asia-Pacific at UBS Global Wealth Management, weighed in at the same panel discussion and said that it is likely the yen will drop below 140 yen against the dollar.
The yen stood at 147.58 against the U.S. dollar as of Jan. 26, compared with 129.78 a year ago.
"The dollar-yen — that's like gambling for me at the moment to be very honest," said Singapore-based Rene Buehlmann, chief executive officer for investments at abrdn, during the discussion.
"But I would certainly say the yen should be a bit stronger as we meet next year," he added.
Abrdn managed and administered £496 billion ($626.2 billion) of assets as of June 30.