Thin trading has become a fixture on the Tokyo Stock Exchange as foreign investors refrain from transactions due to the sovereign debt crisis in Europe.
The trading value on the TSE’s First Section on Jan. 6 totaled 845.6 billion yen ($11 billion), below 1 trillion yen for the 17th consecutive trading day. The 17-day streak was the first since July-August 2003.
Foreign investors, which account for 60 to 70 percent of trading on the TSE, “have been stuck in uncertainties about the European crisis,” said Hiroichi Nishi of SMBC Nikko Securities Inc.
In addition, pension funds and other domestic investors, which supported the stock market, have generally shifted their investment focus to less-risky bonds.
Thin trading has taken a toll on initial public offerings.
In 2011, only 37 companies listed their stocks in Japan, less than 20 percent of a peak figure. It is difficult for companies to raise funds on an inactive stock market.
The daily trading value on the TSE’s First Section had frequently exceeded 1 trillion yen since around 2003 because of an expanding global economy.
The 2-trillion-yen mark is considered a measure of heavy trading.
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