Apparently George Soros is not merely watching as yen soars against USD, now Y95.7/USD, he was using that time to buy into Japanese stocks once again, Inagaki and Zuckerman report for WSJ.
Soros Exits Japan’s Equity Positions
Soros had exited his Japanese equity positions in early May, well before Nikkei embarked on a downward spiral which wiped out nearly half of its yearly gains. NIKKEI 225 (INDEXNIKKEI:NI225), closed at -0.21 percent today and down 17.6 percent since May 22. It has experienced its first major selloff in over six months after rising parabolically since November of last year.
The legendary investor who once bet several billion dollars against the British pound has been active in the shorting yen foray as well. He reportedly booked a $1 billion profit on his short yen trade earlier this year. While others are exiting Japan’s stock market, and many have given the verdict that the selloff has been triggered by foreign investors, Soros is taking advantage of the relatively lower prices to enter the equity trade once again.
The insider who spilled the beans about Soros’ trades said that the present valuation is very attractive for Soros and the fund is buying both large cap stocks and medium cap growth names. Soros thinks that yields of JGB’s are have finally shown some stability which gives more confidence for entering in the markets.
In the past few weeks foreign investors who had aggressively bought into Nikkei and other small-mid cap Japanese stocks, sold approximately $1.4 billion worth of shares , according to Tokyo Stock Exchange. As yen edges higher and gets closer to clearing the gains it collected in past months, Japan’s finance minister Taro Aso said that he had no immediate intentions to weaken the currency.
This of course did not help matters, and yen soared even further against the dollar. A day ago, Shinzo Abe’s easing- friendly comments also did nothing to anchor Nikkei, so it is likely that even if Aso declared another quadrillion in bond buybacks, markets wouldn’t have blinked.