Japanese retail investors have become considerably less bearish on domestic stocks with sentiment at its highest in nearly two years, a Reuters poll Friday showed, reflecting hopes the economy has bottomed out. The monthly survey also showed a majority of retail investors favor the campaign platform of the main opposition Democratic Party, which has a good chance of ousting the ruling Liberal Democratic Party in an election on Aug. 30. The poll's investor sentiment index hit minus 10, an improvement of 24 points on July. This marked the first rise in three months and was the highest level since September 2007 when it was at zero. The index, which is calculated by subtracting the percentage of respondents who say they are bearish from those who are bullish, underscores a growing belief among investors that the economy has bottomed and corporate profits are improving. “I think the Japanese economy has passed through the worst of the downturn. The business performance of major companies is gradually picking up,” said an investor in his 60s. The survey was conducted between Aug. 7 and 13 during which the benchmark Nikkei average hit a 10-month high. A total of 1,027 investors participated in the poll. Among sectors, sentiment towards high-tech and auto stocks returned to positive territory for the first time in 14 and 20 months, respectively.
