TOKYO: Trading using borrowed money, or margin trading, in Japan’s stock market fell sharply last week as investors were forced to dump stocks during the Nikkei index’s biggest fall in nearly 40 years.Margin trading, which involves using borrowed cash from brokerages to ramp up bets in the stock market, is popular among Japanese retail investors.
Margin trading accounts for about 70% of retail trading value, the exchange data showed.
The value of shares bought on margin fell by 907 billion yen (US$6.15bil) to four trillion yen in the week ended Aug 9, from the previous week’s 4.87 trillion yen, according to Japan Exchange Group, which runs the Tokyo Stock Exchange.The amount hit a record high of 4.98 trillion yen in the week of July 26.
The Nikkei plunged 12.4% on Aug 5 in the market’s biggest single-day decline since the 1987 Black Monday crash and bounced back 10% the following day. The index fell as much as 27% from its July peak above 42,000 by Aug 5.
It has since recovered and is now trading at around 36,721 as of early yesterday. — Reuters
