By Akiko Takeda
TOKYO, June 30 (Reuters) - Japanese fund managers cut their global stock weighting to a new six-year low in June, worried that share prices may have risen too far without sufficiently strong evidence of a recovery for the world economy.
They also lifted their bond allocations to a record level on on the view that the recent debate about inflation and the search by central banks for eventual exit strategies from current easy policies has been overdone in light of the fragile state of the global economy.
"For share prices to rise further from here, investors need to see corporate earnings improve in line with what they have been hoping for," said Kenichi Kubo, senior fund manager at Tokio Marine Asset Management.
The poll of 11 fund managers, taken June 16-24, showed their average stock allocation fell to 48.2 in June -- their lowest level since May 2003 -- from 49.7 in May.
"Expectations of a bottoming-out in the global economy have been driving share markets since March. I think markets have already priced in such expectations. Markets are due for a correction in the coming three months or so," said Yoshinori Nagano, senior strategist at Daiwa Asset Management.
MSCI's all-country world index <.MIWD00000PUS> has slipped about 3 percent from a peak earlier in June after having rallied nearly 50 percent since early March.
The survey was expanded to include 11 fund managers, compared to 10 in May, a factor that pushed up the weighting for British shares within the equity portfolio to 8.8 percent from 7.1 percent. Without that factor, regional weightings barely changed.
The allocation for bonds rose to a record 49.3 percent from 45.6 percent in May, with investors saying they believed that recent rises in bond yields stemming from concerns over future inflation have gone too far.
The weighting for North American bonds edged up from the previous month's record low but investors remained concerned about stability of the U.S. dollar.
"It will remain difficult to buy the dollar aggressively on worries China might dump the dollar," said a fund manager at a life insurance company.
China has been calling for the creation of a super-sovereign reserve currency to reduce the dollar's global domination and has been working with other big emerging economies to create an alternative to the U.S. dollar.
Weightings for euro zone and British bonds also dropped as some fund managers fret that rising bad debts at European banks could hurt the euro and the British pound. (Writing by Hideyuki Sano; Editing by Edwina Gibbs)