Japanese Stocks Falling Rapidly

March 17, 2011 James Heinsman Hedge Fund News

This Tuesday, Japanese stocks dropped 10.6%, recording the worst two-day drop since 1987. The plunge is a direct result of the increasing radiation in Tokyo, and more panic-sales are expected to be led by hedge funds in the near future. The enormity of the selloff left fund managers no choice but to sit back and watch.

“Even if we wanted to sell today, there was very little we could do,” said an anonymous fund manager. “We didn’t sell and waited sidelined because hedge funds were just dumping stocks in panic.”

Nikkei originally fell 14% following the report of Prime Minister Naoto Kan that stated that the nuclear contamination risk at the Fukishima Daiichi compound was increasing. Equity stocks plunged and the yen was affected as risky assets were abandoned. The yen stabilized quickly, hinting at authority intervention, but the Ministry of Finance refused to comment.

“All focus is on the nuclear crisis. In the situation where the crisis appears to be worsening, foreign investors, domestic fund operators are pulling out from Japanese shares,” Hideyuki Ishiguro, an executive at Okasan Securities in Tokyo, concluded.

Hedge Funds, Japan, Japan Crisis, Japan Tsunami, Japanese Stocks,

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