By Summer Zhen
HONG KONG (Reuters) – Global investors are turning bearish on once-favoured Japanese stocks following last week’s turbulence as they reassess economic prospects and the viability of yen-funded trades.
Using cheap yen to buy stocks on the Nikkei was a hot trade until this month. The Nikkei index had doubled since the start of 2023, and a tumbling yen had boosted returns for investors and companies.
That trade is being turned on its head by sudden volatility in the Japanese yen, Bank of Japan (BOJ) rate rises, doubts around Japan Inc.’s earnings and worries the U.S. economy is stalling.
The CSOP Nikkei 225 Daily Double Inverse exchange-traded fund – the only ETF outside Japan that allows bearish bets against the Nikkei index – saw a surge in its trading volume during the week ended Aug. 9.
Average daily turnover on the Hong Kong-listed product reached nearly HK$20 million ($2.57 million), a 20-fold increase from previous…
