# BlueBay Sees Near-Term Risk in Japan AI Stocks Followed by Rally > Source: > Published: 2026-06-28 22:00:07+00:00 (Bloomberg) -- RBC BlueBay Asset Management remains bullish on Japanese AI-related stocks, expecting the rally to extend into 2027, while trimming near-term risk ahead of a potential slowdown in July and August. Most Read from Bloomberg - [Trump's U-Turn on Iran Sanctions Would Unravel Decades of Curbs](https://www.bloomberg.com/news/articles/2026-06-28/trump-s-u-turn-on-iran-sanctions-would-unravel-decades-of-curbs?utm_campaign=bn&utm_medium=distro&utm_source=yahooUS) - [An Analyst's Missed Remark Surfaced in Deadly Iran School Strike Probe](https://www.bloomberg.com/news/features/2026-06-26/an-analyst-s-missed-remark-surfaced-in-deadly-iran-school-strike-probe?utm_campaign=bn&utm_medium=distro&utm_source=yahooUS) AI-related shares are likely to correct over the next two months as investors price in peak US hyperscaler spending growth and seasonal rebalancing weighs on Japanese stocks, said Hong Kong-based portfolio manager Maya Funaki. But the sector may rebound next year amid improving sentiment on the prospect of favorable US policy measures ahead of the midterm elections, she said. "While reducing risk is necessary during times of elevated volatility, AI stocks are structurally heading higher," Funaki said. She maintains AI exposure while slightly increasing cash holdings and rotating into cheaper AI names. BlueBay's positioning reflects a broader balancing act as investors stay invested in the AI trade despite growing questions about the rally's durability after last week's selloff in chip stocks. The longer-term outlook for Japan remains constructive, with strategists viewing the country as a key beneficiary of the global AI infrastructure buildout because of its role in the supply chain. Funaki manages about ¥1 trillion ($6.2 billion) in Japanese equities and ¥700 billion in Asia ex-Japan equities, with Kioxia Holdings Corp. and SoftBank Group Corp. among the top holdings in the RBC Japanese Equity Fund. Although she remains broadly bullish on AI, Funaki said the rally has increased concentration risk in the Nikkei 225. She is slightly underweight the index's largest constituents in favor of smaller AI stocks, while using lagging value shares as a hedge in a barbell strategy that pairs contrasting high-risks and low-risk bets. Japan's broad AI exposure, spanning everything from cables to multilayer ceramic capacitors, offers a "highly reassuring way to capture upside in Asia's supply chain," Funaki said. Compared with regional peers such as Taiwan and South Korea, Japan's deeper, more liquid equity market also makes it easier for overseas investors to deploy capital. "Japanese AI stocks are well positioned to capture the upside in Asia's AI supply chain," Funaki said.