AllianceBernstein Holding LP, which oversees $480 billion, recommends buying Japanese stocks, dollar-denominated assets and Asian emerging securities.

Japanese equities, which are lagging behind global peers, will probably recover to levels seen at the beginning of this year, according to Naoki Murakami, a market strategist at the Japanese unit of AllianceBernstein. The divergence between the monetary policies of the Federal Reserve and the Bank of Japan, as well as a prospective gain in dollar-yen, will boost returns on stocks and government bonds in the U.S., he said.

“The Fed’s rate hike is only a matter of time,” Murakami, who previously worked as an economist at Monex Inc. and Goldman Sachs Group Inc., said in an interview in Tokyo Monday. The central bank is likely to raise interest rates in mid-2015, pushing the 10-year Treasury yield above 3 percent and the dollar to 108 yen by the end of the year, Murakami said.

The dollar traded at 102.62 yen as of 9 a.m. Tuesday in Tokyo, after reaching a 5 1/2 year high of 105.44 on Jan. 2.

The Nikkei 225 Stock Average touched 16,320.22 on Dec. 30, the highest since November 2007. On the same day, Japan’s 10- year government yield jumped to a three-month high of 0.74 percent. Benchmark 10-year yields were at 0.495 percent in Japan and 2.39 percent in the U.S. yesterday.

Japan’s cyclical economic recovery will continue, according to Murakami, whose parent company held about 21 percent of its assets in equities and 51 percent in bonds at the end of March.

Policy Difference

The nation’s gross domestic product plunged an annualized 6.8 percent in the three months through June, the sharpest contraction since a record earthquake three years ago, the Cabinet Office said Aug. 13. Economists surveyed by Bloomberg News predict the economy will grow 2.7 percent this quarter.

While Murakami doesn’t expect Japan’s central bank to add stimulus this year, he said policy makers will probably change the way they announce asset purchases in October. The BOJ may follow the Fed in stating the amount of monthly buying, rather than the current year-end target for the monetary base, he said.

The U.S. central bank cut its monthly buying of Treasuries and mortgage-backed securities by $10 billion for a sixth consecutive meeting last month to $25 billion. The BOJ on Aug. 8 maintained its pledge to increase the cash in circulation plus bank reserves to 270 trillion yen ($2.6 trillion) by year-end.

Japan’s government is likely to push back a plan to boost the sales tax to 10 percent in October 2015, although there probably won’t be fiscal implications for bonds, Murakami said.

“It would be appropriate for the government to postpone their decision on the second increase by one or two years,” he said. “The delay or canceling of the sales-tax increase will probably boost stocks.”