Japan’s Long Margin Stock Balance Up Last Week

Tokyo, Oct. 23 (Jiji Press)–The balance of shares bought on margin in Japan rose for the first time in six weeks last week as traders were lured into buying beaten down stocks, a Tokyo Stock Exchange report showed Tuesday.

The balance came to 3,534,023 million yen as of Friday, up 156,869 million yen from a week earlier, according to the report covering transactions on the TSE, the Osaka Securities Exchange and the Nagoya Stock Exchange.

“Traders apparently moved to buy on dips” as the market skidded down in tandem with a weeklong tumble in U.S. equities, Tatsuo Kurokawa, equity general manager at Japan Asia Securities Co., said.

Kurokawa noted that margin traders typically attempt to profit from falls in stock prices by building fresh long positions in anticipation of upturns.

Last week, the 225-issue Nikkei average tumbled 516.8 points, or 3.0 pct, to end at 16,814.37 on Friday. The Tokyo market was dragged down by resurgent worries about the fallout from the troubled U.S. subprime mortgage sector, pullbacks in Indian and other Asian equities, and the yen’s upsurge.

The TSE report showed that the balance of short margin positions declined 27,266 million yen to 1,300,007 million yen, showing the first drop in four weeks, as traders moved to cover short positions to realize gains amid the market’s downswing.

As of Friday, the long-short ratio came to 2.71 in value, up from 2.54 a week before, and 2.94 in volume, up from 2.85.

The average daily turnover on the TSE’s first section increased to 2,652.4 billion yen from 2,681.2 billion yen.END

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