Why Cheap, Ignored Japan Stocks May Soon Surprise

Photographer: Kiyoshi Ota/Bloomberg
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One of the biggest headwinds for Japanese stocks at the moment, despite trading near their highest this year, is investors just don’t seem all that excited.

Average trading volumesBloomberg Terminal this year are down more than 50 percent from their 5-year mean, worse than those in Europe and the U.S., and a world away from China, which is running about 60 percent above average, according to data compiled by Bloomberg. Foreign investors have made net sales of more than $17 billion of Japanese equities through April 10, according to EPFR data compiled by Jefferies.