The Japanese Stock-Buying Greatest Fool Uncovered: France

French investors are piling into Japanese stocks again - just as they did at the end of 2013 - and as Bloomberg reports, this is a sign to Nomura that the market is poised to fall as those same French 'investors' unceremoniously dumped it all in January and February of 2014. “The French were huge net buyers at the end of last year... and now they're doing it again," noptes Nomura, "if they decide to unwind positions, the Japanese market is in for a drop."

 

As Bloomberg notes,

French investors are piling into Japanese stocks again, a sign to Nomura Holdings Inc. that the market is poised to fall.

 

 

The chart above shows France’s asset managers were the largest net buyers of Japanese shares over the two months of November and December 2013, when the Topix index rose 9.1 percent. They turned into the biggest sellers the next two months, central bank data show, as the equity gauge tumbled 7 percent. French investors returned to the top buying rank in October, an indicator to Nomura that history may repeat.

 

...

 

“The French were huge net buyers at the end of last year before switching roles in January and February and sending the market lower,” said Jun Yunoki, a strategist at Nomura. “Now they’re doing it again. France has many derivative and quantitative investors that swing in and out of markets.”

 

“They don’t usually buy so much, so the fact they’ve been snapping up such large quantities again is worrying,” Yunoki said. If they decide to unwind positions, the Japanese market is in for a drop, he said.

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Wondering why France would be such huge outsized buyers of Japanese stocks? Wonder no more...

 

So - as France piled into Japanese stocks... Japan's Portfolio Investment in French stocks rose by the most since January 2009!!!

How do you say "you scratch my back..." in Japanese?

Unrigged!