Mrs Watanabe Is Back And Now Has Record Margin

Tyler Durden's picture

It is now clear that Abe and his pals are all-in on the reflation strategy - albeit scorned in their unilateralism by the G-7. Stocks (and oil prices) have surged as the JPY plunged - but things are getting even more critical in the land of the rising sun. The retail investor is all-in too; individual investors’ share (cash transactions only) has risen sharply to 34% - the highest level since June 2009; the combined trading value of the seven major internet brokerages expanding 86% MoM to ¥19.5tn in January, marking the highest level since April 2006; and aggregate margin trading at the seven online brokerage firms has doubled from ¥7.3tn in December 2012 to ¥14.3tn in January 2013. Retail, according to Goldman, tend to focus on low price, small cap stocks - as if the markets' relative beta was not enough. If the BoJ was hoping for a M.A.D. situation - it appears they have it as retail is now fully (and levered) exposed to Abe's endgame (let's just hope energy costs don't crush that dream).

Retail trading volume is its highest since 2009...

 

as, thanks to considerably easier margin rule changes in January, margin transactions have almost doubled MoM...

 

Charts: Goldman Sachs