Excel in the market with Kōri no Kōjō’s market mastery and enjoy trading｜Episode 3 [Kōya Hiroo]

Hiroshi Kouno Profile

After joining Japan Kogyou Maru Securities (now Mizhuho Securities) in 1971, he worked as an analyst in the Research Department. After a stint in the United States, he consistently conducted information and market analysis on Japanese stocks. In 1996 he transferred to an asset management firm (now Asset Management One), served as Head of Research and Head of Investment Department, and then held the position of Managing Executive Officer and Head of the Investment Trust Operations Division. He retired in 2012. Since then he has been active on TV and radio. His half-century of experience in market analysis focused on Japanese stocks.

Newsletter:https://www.gogojungle.co.jp/finance/salons/8812/

In this issue, I would like to discuss the buying and selling trends by investing entities that influence fluctuations in Japanese stocks, as well as stock-price levels determined by price volatility (volatility), price-earnings ratio (PER), and price-to-book ratio (PBR).

When validating the movement of Japanese stocks mainly by investing entities, the pattern is that Japanese stocks rise only when overseas investors continue net buying for several weeks, and naturally fall when the persistent buying stops. It also seems related to why Japanese stocks cannot decisively surpass the 24,000 level. In fact, there are times when Japanese stocks rise even without continued net buying by overseas investors—one-month autonomous rebounds when indicators such as the advance-decline ratio and PBR indicate clear overselling.

In the Tokyo market, the financially most prudent buyers on data are individual cash accounts. They only buy when overseas investors are selling, during price declines from market highs or near the bottom. They participate at chart points that occur only 2–3 times a year.

Since the end of 2018, short-selling markets have increasingly shown a trend where selling positions surpass buying positions, a situation that signals potential downside due to changes in the external environment, with no clear optimism for Japanese stocks.