Time to short Japan’s ‘bad governance’ stocks

An electronic stock board showing the Nikkei 225 Stock Average figure displayed inside the Kabuto One building in Tokyo, Japan, on Thursday, June 1, 2023. - Bloomberg

Tokyo: The blistering rally in Japanese stocks has unfairly benefited companies that are flouting the bourse’s campaign to boost valuations, creating a major short opportunity, according to a top-performing hedge fund manager.

Reform efforts have been touted as one reason for Japan’s world-beating gains this year, but even some “bad governance” companies have been riding the wave, according to Zuhair Khan, a fund manager at Union Bancaire Privee who has been following the market for more than two decades.