Investors cautious as Japan's stock market outperforms S&P 500.

Despite Japan's stock market reaching multi-decade highs, large investors are staying out due to sagging momentum and the prospect of the central bank unwinding its massive monetary stimulus. BlackRock recommends an "underweight" allocation to Japan and is waiting for policy uncertainty to clear. The policy outlook presents currency risks, and UBS' chief investment office prefers China as a global slowdown looms. While some money flows in, many foreign asset allocators are still reluctant to venture into the market.