JPMorgan Private Bank said Thursday it remains underweight on Japanese equities, adding that the bank is unlikely to shift its stance on the market until there is more concrete proof of structural reforms in the world's third largest economy.
(Read More: How a Big Election Win for Abe Could Defeat Reforms)
"We want some proof. The first two arrows are showing signs of working, but you just don't know if those two arrows get him [Prime Minister Shinzo Abe] elected and the follow through isn't there," Nathan Slack, head of Southeast Asia at JPMorgan Private Bank told CNBC Asia's "Squawk Box", referring to elections for the upper house of parliament scheduled for July 21.
Abe's Liberal Democratic Party (LDP) is expected to secure a majority in the elections. This could make it much easier to pass through reforms for the labor market and deregulation, which form the third arrow of Abe's policies to rejuvenate the economy.