Investors appear to be warming to investment in Japan, judging by a number of fund launches, and now Skandia Investment Group has joined the trend by raising its asset allocation on the Asian nation to positive from negative.

The positive weighting of SIG is the first time it has adopted this stance on Japan since since August 2008.

“At the end of November the markets were encouraged by Japanese efforts to fight deflation and to tackle the currency concerns. We are not diving in head first, but if the government steps up its effort to end deflation, weaken the yen and boost growth, Japan has the ability to perform well relative to other equity markets, and so we have increased our exposure from small underweight to small overweight,” James Millard, SIG chief investment officer, said in a note.

“We have, however, significantly increased our exposure to emerging markets, especially Asia Pacific ex Japan (APxJ), which we have increased from 1 per cent to 6 per cent. APxJ has performed poorly over recent months on fears that monetary policy tightening could derail the recovery. We think these fears are overblown and expect the region to start to outperform again in the near future,” he said.

Last week, Gartmore, the UK asset manager, launched a Japan-focused absolute return fund. In a similar vein, Ashburton, the Jersey-based active investment manager, has refocused its Asia Pacific Equity Fund to concentrate solely on equity growth in Japan, renaming the portfolio as the Japan Equity Fund.

Japanese stocks have lagged far behind their Asian peers, as the country’s economic performance has faced headwinds of high public debt and an ageing workforce. However, a number of investment firms take the view that the country is due to make progress in the next year or so, if only on a relative scale.