LONDON, July 9 Reuters The BlackRock Investment Institute BII said on Tuesday that Japan stocks were its favoured equity investment play, while the prospect of higherforlonger interest rates made inflationlinked bonds attractive on a strategic horizon.

Japanese equities are our highest conviction equity view thanks to support from the return of mild inflation, shareholderfriendly corporate reforms and a Bank of Japan that is cautiously normalizing policy rather than tightening, said BII, an arm of U.S.based investment firm BlackRock that provides proprietary investment research.

Meanwhile on a strategic horizon, BII said in its midyear outlook it liked inflationlinked bonds given higherforlonger policy rates as well as large fiscal deficits. On a country level, Mexico and India should benefit from rewiring supply chains in the long term, BII added.

Reporting by Karin Strohecker; editing by Dhara Ranasinghe

Source Reuters