With China's growth rates showing early signs of stabilisation, the likelihood of further fiscal stimulus packages this year is low, says Threadneedle Asset Management.

Similar signs of stabilisation are evident elsewhere in Asia, but it is still the case that global export markets are depressed which is the spark that will ignite a more meaningful recovery, the fund house notes.

Unemployment rates are still on the rise which is another factor that leads to the conclusion that there are limited prospects for growth next year. The fiscal stimulus packages are beneficial in terms of supporting the level of output but the quality of the growth is much weaker than has previously been the case.

Alongside this, the phenomenon of extreme  destocking and restocking in the inventory cycle will only increase the volatility of quarterly growth figures.

Threadneedle's preferred region is Asia ex-Japan. Regional markets have continued to respond positively to evidence of economic stabilisation, the fund house says, with first quarter GDP numbers for China and Korea coming in ahead of market expectations. Stimulus measures by the Chinese authorities appear to be having a beneficial impact on economic activity, the fund house notes.

Threadneedle has an underweight position in Japan because exports have collapsed and consumer confidence has fallen sharply, and it expects a larger fall in corporate earnings than seen in other major markets.