Forced Margin Selling Seen Exacerbating Japan Market Rout
- Retail investors’ margin buying position reached 18-year high
- Tax-free accounts had encouraged more Japanese to buy stocks
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The swift downturn in the Japanese stock market likely triggered a massive wave of forced selling among retail investors, deepening the rout.
The Topix index plunged more than 7% with companies such as Mitsubishi Heavy Industries and Sumitomo Mitsui Financial diving more than 15%. The scale of selloff is such that some market players think individual investors are now being forced to dump stocks they had bought on margin.