Just as we see in the U.S. & European Regions, we are seeing increased short exposure in Japan in the first two weeks of 2026 with short interest increasing by $8.0 billion or +6%.

This $8.0 billion increase in short interest is made up of $1.2 billion of new short selling and a $6.8 billion mark-to-market increase of existing short positions. Shorts are shorting into a rising market.

Short sellers are increasing their exposure in unprofitable positions because they are looking to increase their overall long & short leverage in the region.

Only two out of twelve sectors had a decrease in short interest, Consumer Staples short interest declined by -$930 million while the Information Technology and Industrials sectors were up $2.7 billion and $2.4 billion respectively.

Japanese short interest increased from $126 billion at the beginning of 2026 to $134 billion on January 15th. This increase was made up of $1.2 billion of increased short selling and a $6.8 billion mark-to-market increase in the value of existing shorts. The largest amount of new short selling occurred in the Information Technology sector while Consumer Staples saw the most short covering.

Shorts have incurred mark-to-market losses in all but two Japanese sectors so far in 2026 and are down -$6.8 billion, -5.24%, in mark-to-market losses. Shorting into a rising market indicates that short sellers are either looking for a pullback or are leveraging their portfolios on both the long and short sides.

We can look at the specific stocks with the largest increase of short selling and short covering in the Industry Groups with the largest increases and decreases in short selling:

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