Soros Fund Back in Japan
June 7, 2013 Leave a comment
Jun 7, 2013
Soros Fund Back in Japan
By Kana Inagaki and Gregory Zuckerman
Investors of all types are selling Japanese stocks, worried a recovery might not be easy for the government to engineer. But George Soros’s firm, Soros Fund Management, is buying once again. Mr. Soros’s firm, which manages $24 billion of the investor’s cash, sold much of its Japanese -stock position in May, before the recent, steep sell-off, according to someone close to the matter. Mr. Soros, who had scored gains of more than $1 billion on bets against the Japanese yen and on Japanese stocks, returned to the market this week after seeing some signs of stability in the Japanese bond market, the person said. His fund is also ramping up buying of shares in Japanese companies from big global blue-chips to medium-cap growth stocks, the person added. While the recent sharp fall in shares came as a surprise, the current level of the stock market is “very attractive” to the Soros firm since it expects Japanese economic figures and earnings to pick up.The U.S. investor’s moves come after Tokyo stocks plummeted in recent weeks. That interrupted a stellar rally that began in mid-November, spurred by hopes of Japan’s determination to lift the economy out of deflation and stagnation. Other markets, from bonds to currency, have also been volatile since the Bank of Japan in April unveiled a massive bond-buying program, which triggered a jump in yields on Japanese government bonds.
On Friday, the Nikkei Stock Average briefly crossed into bear-market territory—passing a line 20% below the intraday peak of May 23—but then recouped some losses to close the session down 0.2% at 12877.53. The dollar also momentarily dipped to a fresh one-month low of ¥95.55 in Tokyo trading before climbing back up to the ¥97 level.
In the past two weeks, foreign investors—who had piled into the market from late last year—sold a net $1.4 billion of Japanese shares on the country’s three main exchanges, according to the Tokyo Stock Exchange.
Market watchers say long-only foreign funds remain mostly cautious about Japan until the sharp swings subside, but some global macro hedge funds—which trade on big-picture themes—are already starting to go back into the market, or are at least thinking of it.
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