3min chapter

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Hopes For Global Growth Fade As China Data Disappoints Again

Market Depth

CHAPTER

The Importance of Capital Flows in Japan

If foreigners push the Nikkei to break clear through 30 came about, then it means that there's a lot of Japanese investors who will find themselves horribly misallocated. Then they will be forced to rebalance and come in behind the foreign capital longs and start buying Japan equities with Japanese capital repatriated. That chronology of capital flows matters. It's what makes a difference between a sustained period of price appreciation versus just like a quick in and out rallying crash. If foreign capital comes in and there aren't buyers behind them, then shares go nowhere, and then they dump out in the crash market. We've seen that time and time again.

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