A Bloomberg survey of 1,452 users reveals that the leading financial centers in the eyes of Bloomberg users is New York (29%), Singapore (17%), London (16%) and Shanghai (11%), while only 1% named Tokyo. London is slipping because of a 50% tax rate on higher earnings and impending EU regulations on hedge fund borrowing, while Japan has all but fallen off the radar screen.

UK/European investors are also turning negative on Japanese stocks, with Standard Life and ING Investment saying they are underweight Japan because of the troubling signals that the new DPJ government is sending investors, i.e.,

1) Statements by the finance minister that Japan will tolerate a strong yen
2) A loan moratorium on smaller company loans
3) The un-privatization of Japan Post
4) No signs of a willingness to take on structural change
5) The need for the big Japanese megabanks to raise an additional JPY1~JPY2 trillion of capital,
6) Changes in maximum rates chargeable by consumer finance companies and an effective open liability for "excess" interest rates previously charged.
7) P/E multiples at 37X average for Japanese stocks, which is noticeably higher than global peers, even though Japan is trading at a relatively cheaper PBR.