A survey of six Japan-based fund managers, conducted April 17-22, showed respondents on average wanted to allocate 43.3 percent of their portfolios to equities, slightly higher than 43.1 percent in March.

Global share prices have rallied over the past month as fears of a sharp slowdown in the world's economy ease and commodity prices have recovered, with U.S. S&P 500 index <.SPX> coming within a whisker of its all-time high marked last May.

Within equities, fund managers increased their weighting for Japanese stocks to 60.5 percent -- the highest since at least 2011 -- from 53.1 percent in March.

Expectations of more monetary easing by the Bank of Japan and fiscal spending by the government are seen as helping to underpin Japanese shares.

Some analysts also say the market's valuation looks relatively cheap, after it underperformed the rest of the world earlier this year.

The Topix <.TOPX> index of the Tokyo Stock Exchange's main board has fallen more than 11 percent so far this year, compared to small gains in U.S. S&P 500 <.SPX>.

Topix is now trading at 13.6 times profits, compared to 19.6 times in U.S. S&P 500 <.SPX>, according to Thomson Reuters Eikon data.

Japanese fund managers reduced their weighting on U.S. and Canadian stocks to 23.8 percent in April from 28.8 percent in March. They also cut their euro zone weighting to 4.6 percent from 6.3 percent.

In the bond market, fund managers cut their weighting on Japan to 37.2 percent from 39.9 percent as yields on long-dated Japanese bonds plunge to record levels, making JGBs highly unattractive for long-term investors.

The 30-year JGB yield fell to record low of 0.265 percent earlier this month and bonds with maturity of up to 12 years are currently trading at negative yields.

"Japan's bond market is essentially in a state-orchestrated bubble state. But with no exit in the BOJ's monetary easing in sight, we could see JGB yields falling further into negative territory," said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.

The BOJ held off on expanding monetary stimulus on Thursday, even as global headwinds, a strong yen and soft consumption threatened to derail a fragile economic recovery. But many economists expect it will have to ease again soon unless business conditions improve.

The BOJ stunned markets in January by adding a 0.1 percent negative interest rate to its massive asset-buying programme, dubbed "quantitative and qualitative easing" (QQE), in a fresh attempt to accelerate inflation to its 2 percent target.

Fund managers increased their weighting on North American bonds slightly to 34.6 percent from 33.9 percent, and on euro zone bonds to 17.9 percent from 17.6 percent.

Asia bonds saw the biggest increase in their weighting, rising to a one-year high of 5.4 percent from 3.7 percent in March.

(Editing by Kim Coghill)