L 130 L120 L110 L 100 L 9O 80 2007 2008 2009 2010 2011 2012 2013 2014 FMS Net% say OW JP Equities, Ihs JP Performance vs World, rhs Source: BofA Merrill Lynch Global Fund Manager Survey 2016 Our Japanese equity and FX strategist Shusuke Yamada has been arguing for a while that we would see both a weaker JPY and a rebound in

00 4.0% 1200 3.5% 1000 . 800 3.0% 600 ‘01 ‘02 ‘03 '04 '05 '06 ‘07 ‘08 09 10 11 12 '13 14 15 16 “17 FMS avg cash balance (%) — S&P 500 (RHS) Source: BofA Merrill Lynch Global Fund Manager Survey, Bloomberg. As a reminder, the FMS Cash Rule works as follows: when average cash balance rises above 4.5% a contrarian buy signal is generated