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Stocks

Market Scramble: Retail traders steer clear of BOJ's wake

TOKYO -- Individual investors are passing over Japanese blue chips sustained by the Bank of Japan's index buying, turning instead to more mobile shares.

Prominent day trader Naoki Murakami, who moves hundreds of millions of yen a day, said he avoids the Tokyo Stock Exchange's first section, describing it as "controlled market that doesn't go up or down." Known by the nickname "Murayan," he focused Tuesday on companies outside the BOJ's reach, including online magazine publisher Brangista, which trades on the Mothers market for start-ups, and Jasdaq-listed recording industry tracker Oricon.

Brangista ranked seventh in turnover across all Japanese equity markets Tuesday. It drew attention in spring for a smartphone game produced by lyricist Yasushi Akimoto, producer of idol megagroup AKB48, and again in September after announcing a collaboration with South Korean stars. Murakami said he has made multiple trades in Brangista worth tens of millions of yen each.

The Bank of Japan has doubled its purchases of exchange-traded funds to 6 trillion yen ($57.7 billion) a year, supporting blue chips on the first section of the Tokyo Stock Exchange. The prices of those stocks "don't move much, so there's no appeal in trading them," said a Tokyo-based trader.

Stocks on the TSE's second section, as well as the Jasdaq and Mothers markets, move more sharply in response to even minor news, presenting more opportunities for profit. The Nikkei Jasdaq Stock Average hit a nine-month high Tuesday.

Yaskawa Information Systems was the most heavily traded stock on the second section Tuesday. A report in late July that the company would offer a virtual reality interface designed for manufacturers caught traders' attention, as has the stock's lack of BOJ influence. Yaskawa's share price has tripled since mid-August. Big-data analytics company Metaps went limit-up Tuesday after announcing last week that it was in talks with Mizuho Bank on a fintech tie-up.

Oricon has also seen a flurry of activity on reports that Honda Motor is close to commercializing a magnesium-based battery. Though the company is best known for its CD sales ranking, it says it also has a subsidiary that researches magnesium refining technology.

"Retail investors are focusing more on price movements than on weighing the information out there when they trade," said Chihiro Ota of SMBC Nikko Securities.

That the 10 most-traded stocks account for 70% of total turnover on Jasdaq, compared with just 20% on the TSE's first section, underscores the extent of share-flipping retail investors' activity in the former market. One man who has been playing the stock market for 60 years said he makes upwards of 30 trades a day, having switched to a brokerage plan that lets him trade 1,000 times a month for a fixed commission. 

But these bursts of investor activity in a particular stock tend not to last long. Retail money quickly follows whatever news is trending. That individuals are immersing themselves in short-term trades to avoid the BOJ's presence adds to the impression of a distorted stock market.

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