Asia Pacific investors are concerned about geopolitical tension upsetting the regional markets and feel that Abenomics will not deliver markedly higher economic growth for Japan, Fitch Ratings said on Friday, citing results of a survey.
The Fitch Ratings' Asia-Pacific fixed income investor survey found that 79 percent of the respondents saw geopolitical risk as a high risk to credit markets.
This was similar to Fitch's latest European survey where 85 percent of the respondents flagged geopolitical risk as a high risk.
Investor concern over high-profile global sources of risk such as the protracted crises in Ukraine, Iraq and Syria, rather than regional Asian issues may have driven the results, the agency said.
That said, domestic political risks were highlighted in Thailand following the military takeover of the government in May, and by the outbreak of protests in Hong Kong, Fitch noted.
Also, 70 percent of the respondents do not expect Abenomics to succeed in returning Japan's economy to a sustainable higher growth path. The agency still believes that Abenomics has the potential to lead Japan onto a stronger trend nominal and real GDP growth trajectory.
However, the Bank of Japan's aggressive easing underscores the challenges the authorities face in getting the economy onto a path of sustainable stronger real and nominal GDP growth via the strategy of Abenomics, Fitch Ratings said.
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