Nikkei bear market rally possible with foreign investors still wary- JPM

Investing.com-- A bear market rally in Japanese stocks was possible as foreign investors remained on the sidelines, JPMorgan analysts wrote in a note, although this trend also spurred doubts over the sustainability of an ongoing rebound in the market.While both indexes did rebound sharply from the losses, JPM argued that the rebound was driven chiefly by “contrarian domestic individual investors and domestic institutional investors.

This made it “premature to conclude that we have entered a sustained relief rally,” JPM analysts wrote. Foreign investors had aggressively sold Japanese equities last week, with JPM stating that there was no indication that they had returned to Japanese markets during the recent rebound. Sentiment towards Japanese markets was decimated by hawkish signals from the Bank of Japan during an end-July meeting, where the central bank hiked interest rates and flagged more increases this year.

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