Meanwhile, Japan's economic slump and fears of currency losses on investments abroad have kept the yen at home. Domestic factors further dampened Asian sentiment. In recent months analysts have trimmed profit forecasts for most companies in key markets. It doesn't help that many exchanges are flush with interest-rate sensitive stocks in finance and property. Japanese investors are timid these days, particularly in stocks and foreign bonds, shooed away by the falling Nikkei and rising yen.
Institutions are similarly cautious.
Life insurance companies have seen their stock profits dwindle to an estimated one-eighth of 1989 gains. Once it looks expensive, we will finally see money flowing back to Asia. Asia will be main beneficiary because of compelling valuations. There is the view that the world economy will turn upward again next year, boosting bottom lines all around. And though they may not be cut for several more weeks, U.S. interest rates have peaked, maintain economists and fund managers.