Hedge funds dumped Japanese stocks ahead of upper house election, says Goldman
Sunday's election dealt a major blow to Prime Minister Shigeru Ishiba and his ruling coalition, just as investors who had been selling Japanese bonds and stocks in the run up to the election had expected.
Japan's benchmark Nikkei 225 and Topix have dropped 1.7 per cent and 0.6 per cent, respectively so far this month, bucking the rally in other stock markets.
Both indexes closed down on Friday.
Sunday's outcome further weakens Ishiba's grip on power, even though he has vowed to remain party leader to complete trade tariff negotiations with the United States.
The selling by hedge funds between July 11 and July 17 was mainly driven by increased short bets and a relatively moderate reduction in long positions, according to a Goldman Sachs prime brokerage note on Friday, seen by Reuters on Monday.
Markets in Japan were closed for a holiday on Monday, but the yen strengthened while Nikkei futures rose slightly, as the election results appeared to be already priced in.
Overall, hedge funds remain overweight Japan compared to its weight in the MSCI World Index by 0.6 per cent, Goldman said.
Analysts said uncertainty about the prime minister's future has increased and could lead to "policy paralysis" and larger fiscal deficits.
"This marks the first time since 1955 that the LDP-led government has fallen below a majority in both the lower and upper house, potentially increasing political instability in Japan," MUFG analysts said in a note.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
8 minutes ago
- CNA
Trump says US to impose 25% tariff on India from Aug 1
US President Donald Trump has declared a 25 per cent duty on Indian imports and a unspecified penalty, which will take effect on Aug 1. He made the announcement on his Truth Social account. Rebecca Bundhun reports from Mumbai.
CNA
26 minutes ago
- CNA
Verisk expands residential insurance push with $2.4 billion AccuLynx deal
Data analytics firm Verisk said on Wednesday it will buy AccuLynx, which makes software for roofing contractors, for $2.35 billion as it looks for a bigger foothold in a key segment of the residential insurance market. The all-cash deal could allow Verisk to simplify interactions between insurers and contractors, which it says will speed up claims and lower expenses for policyholders. The deal also highlights growing interest in home repair companies, as severe weather and rising repair costs pressure both insurers and homeowners. Roofing is one of the most expensive components of property insurance. The acquisition, scheduled to close by the end of the third quarter, is expected to add to Verisk's adjusted earnings per share by the end of 2026. Its shares rose 2 per cent before the open. Goldman Sachs and PJT Partners are serving as financial advisers to Verisk, while William Blair advised AccuLynx. EARNINGS BEAT Verisk also reported better-than-expected profit for the second quarter on Wednesday, driven by strong demand from property and casualty insurers for its underwriting risk assessment tools. Adverse weather has prompted P&C insurers to spend more on analytics to better assess policy risks. On an adjusted basis, Verisk earned $1.88 per share in the second quarter, beating analysts' estimates of $1.77, according to data compiled by LSEG. On reported basis, the company's underwriting revenue increased 8.3 per cent in the quarter, while claims revenue climbed 6.6 per cent. New Jersey-based Verisk now expects adjusted earnings per share between $6.80 and $7.00 for 2025, a slightly narrower range compared with $6.80 to $7.10 it had expected earlier.
Independent Singapore
an hour ago
- Independent Singapore
Toto jackpot swells to $10 million yet again after three draws without a winner
Photo: WM Commons SINGAPORE: The Toto jackpot has grown to $10 million yet again for the next draw on Thursday (Jul 31) as no one has clinched the top prize in the past three consecutive draws. According to Singapore Pools, there were no winners in the first prize group during the draws held on Jul 21, 24, and 28. As a result, the unclaimed prize money has been rolled over and accumulated. This marks the eighth time in 2025 that the jackpot has hit the $10 million mark. Under Toto's rules, when the first prize remains unclaimed for three draws, the jackpot continues to snowball, but if it still remains unclaimed after the fourth draw, the total prize amount will not be carried forward again and will instead be distributed evenly among winners in the next prize group. If no one secures the Group 1 prize on Thursday, the entire accumulated amount will be shared among those who win Group 2. See also CNY Toto draw jackpot prize of S$5M attracts long lines of punters Earlier this month, the jackpot of more than S$12.76 million was divided equally among the 12 winning bets in the second group after no one claimed the top prize for the fourth draw in a row. Each bet received S$1.186233 million, making each Group 2 winner a millionaire overnight. Singapore Pools advises participants to play responsibly and reminds the public that official tickets should only be purchased from authorised retailers or through its website and app. () => { const trigger = if ('IntersectionObserver' in window && trigger) { const observer = new IntersectionObserver((entries, observer) => { => { if ( { lazyLoader(); // You should define lazyLoader() elsewhere or inline here // Run once } }); }, { rootMargin: '800px', threshold: 0.1 }); } else { // Fallback setTimeout(lazyLoader, 3000); } });
