Skip to content
Subscriber Only

Hedge Funds Seek Returns in Japan as China Bubble Concerns Mount

Employees work on the trading floor of the Tokyo Stock Exchange, operated by Japan Exchange Group Inc., in Tokyo, Japan, on June 16, 2015.

Employees work on the trading floor of the Tokyo Stock Exchange, operated by Japan Exchange Group Inc., in Tokyo, Japan, on June 16, 2015.

Photographer: Tomohiro Ohsumi/Bloomberg

While China’s world-beating stock market rally is generating headlines, some of the biggest Asia-focused hedge funds are looking further east for profits.

Hutchin Hill, Indus Capital Partners and Oasis Management (Hong Kong) are among firms touting winning trades among Japanese power producers, and makers of foods and beverages, and semiconductor parts. A push by Japanese Prime Minister Shinzo Abe to improve corporate governance has made the market a favorite of hedge funds at the same time as fears that Chinese markets are entering bubble territory mount following gains of as much as 150 percent in the country’s two best-performing stock market indexes during the past year.