(For a full table of the poll results, see )
By Chikafumi Hodo and Mari Terawaki
TOKYO, Nov 28 (Reuters) - Japanese retail investors became slightly less pessimistic about domestic equities in November, seeing some buying opportunities in undervalued stocks after three months of record-low investor sentiment.
However, the overall mood remained gloomy as a deepening global economic slowdown clouded the outlook for Japanese exporters and left stock markets vulnerable to panic selling, a monthly Reuters survey showed.
Some individual investors said Japanese stocks may be oversold, with the benchmark Nikkei average clawing back from a 26-year trough below 7,000 hit in late October and U.S. stocks coming off lows as governments and central banks tackle the credit crisis.
"Exporters' earnings will improve when the current trend of the bullish yen gets corrected," a man in his 50s said. The survey is conducted anonymously via an online magazine at the Reuters Japanese website (http://www.investor.reuters.co.jp/home/).
"The economy is deteriorating, but Japanese stocks are oversold looking at the price/book-value ratio. This kind of situation won't last for a long time."
Investors also hoped political change could open the way to economic recovery, with a majority saying the main opposition Democratic Party should come to power in the next general election, which must be held by September 2009.
Global fears of a long and deep recession have heightened the appeal of the yen, which is considered relatively safe, and the strengthening currency has weighed on Japanese exporters.
The survey's investor sentiment index stood at minus 50 in November after sticking to a record low of minus 60 in August, September and October.
The index is calculated by subtracting the percentage of investors who say they are bearish from those who are bullish.
Polling was conducted on Nov. 10-13 when the benchmark Nikkei share average recovered above 9,000, but a stronger yen pushed the average close to 8,000 by the end of the period.
On Friday, the benchmark Nikkei stock average closed the morning session at 8,421.09, up 0.6 percent from Thursday after slipping below 7,000 for the first time in 26 years on Oct. 28.
Of the 1,101 retail investors who responded to the survey, 12 percent were in their 70s or older, 29 percent were in their 60s, 22 percent in their 50s, 20 percent in their 40s, 13 percent in their 30s and 3 percent in their 20s.
Ninety-three percent of the respondents were male.
Many investors remained bearish given the dismal macroeconomic context.
"The global economic slowdown is expected to worsen. This will have an impact on Japanese exporters," said a man in his 50s. "Domestic consumption will fall if personal income falls, which could push down share prices."
Japan's output shrank 0.1 percent in the July-September quarter, sending the world's second-largest economy into its first recession in seven years.
The gross domestic product (GDP) figure translated into an annualised fall of 0.4 percent.
INVESTORS SEEK POLITICAL CHANGE
More than 60 percent of respondents wanted the main opposition Democratic Party to win the next general election.
Only 29.3 percent chose the conservative, pro-business ruling Liberal Democratic Party, which has ruled for most of the five decades since it was formed in 1955.
Respondents expected that the next election for parliament's lwoer house may not take place until the national budget for the next fiscal year is passed in March.
"It is important to switch (to the Democratic Party) first and then see what happens," a woman in her 60s said.
"I don't think things will improve with the Democratic Party, but an occasional change in power could bring positive prospects," a man in his 60s said.
The poll also showed that investors see a preferential treatment of securities tax as the top priority for the next government.
The second highest priority was improving child care and welfare and the third highest concerned measures to support small- and middle-sized corporations, the poll showed.
The monthly poll aims to capture the views of readers of an online magazine aimed at users of the Reuters Japan Web site (http://www.reuters.co.jp).
(Editing by Sophie Hardach)