Atom optimistic about Japan, but remains short

Global macro factors are weighing on Japan hedge fund manager Atsuko Tsuchiya’s net exposure deliberations.

Atsuko Tsuchiya established the Atom Japan Alpha fund earlier this year. It is down single digits so far, having missed the rally in April as the fund had just launched and was still in the process of getting invested. Today it manages its $12 million of seed capital.

Tsuchiya is keeping gross and net exposure down, as she is concerned about European risk. The net exposure at the end of November is short by 10%.

“The fund is currently short because of Europe,” she says. “It’s a macro view of the correlation of sovereign risk on global equity markets. Japan is not impacted directly by Europe and should individually do better than elsewhere.”

However, the fund is trading-oriented, and her exposure position could switch around to net long at any time. She feels that the Eurozone’s uncertainties are not yet fully priced into the market, but she wants to see a correction in Japan before switching to a long position.

She also reinforces that Japan’s under-performance is more prevalent at times of a strong yen because of the knock-on effect on exporters, adding that a weaker yen should strengthen the market. Though Tsuchiya says the strong yen doesn’t directly affect the hedge fund’s performance because its forex exposure is hedged.

Tsuchiya founded Atom Capital Management in April 2008. She started out in Japanese equities with Kleinwort Benson, then worked as a portfolio manager at Citadel, before heading a proprietary trading desk at Merrill Lynch. She has also had spells at Sparx Asset Management and Gartmore Japan.

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