While the Japanese market has been trending downward for most of the year with the Nikkei down -8.6%, short sellers have not performed well in a market that seemed to be made for short selling. The largest shorts in the Japanese market are:
Japan Short Interest
Ticker
SI % Float
Short Interest
SOFTBANK CORP
9434 JP
6.22%
$2,638,937,442
TOYOTA MOTOR CORP
7203 JP
1.45%
$2,478,066,128
ITOCHU CORP
8001 JP
3.31%
$2,059,345,625
MITSUBISHI UFJ FINANCIAL GRP
8306 JP
1.34%
$1,758,630,396
SUMITOMO MITSUI FINL
8316 JP
1.82%
$1,573,158,758
HONDA MOTOR CO
7267 JP
3.58%
$1,354,552,367
CANON INC
7751 JP
5.12%
$1,324,787,652
CHUGAI PHARMA CO
4519 JP
3.46%
$1,245,705,918
JAPAN TOBACCO INC
2914 JP
3.19%
$1,074,183,102
MITSUI & CO LTD
8031 JP
1.90%
$983,883,300
BRIDGESTONE CORP
5108 JP
4.26%
$962,818,122
MIZUHO FINL GRP
8411 JP
1.56%
$907,407,438
MITSUI OSK LINES LTD
9104 JP
8.44%
$888,462,706
ORIENTAL LAND CO
4661 JP
4.13%
$884,505,979
FAST RETAILING CO LTD
9983 JP
1.47%
$854,817,427
NIPPON STEEL CORP
5401 JP
4.47%
$847,631,841
KDDI
9433 JP
1.56%
$834,740,506
TAKEDA PHARMACEUTICAL CO LTD
4502 JP
1.72%
$803,961,906
NINTENDO CO LTD
7974 JP
0.91%
$794,440,959
DAIWA HOUSE INDUSTRY
1925 JP
4.19%
$774,123,385
SUMITOMO CORP
8053 JP
2.90%
$768,980,815
KAWASAKI KISEN KAISHA
9107 JP
10.47%
$760,134,976
HITACHI LTD
6501 JP
0.70%
$758,358,240
MITSUBISHI CORP
8058 JP
1.18%
$748,028,230
AEON
8267 JP
4.04%
$721,366,110
Total Short Interest
4.89%
$112,251,572,034
Japanese short sellers are down -4.7% for the year but surprisingly that in a downward trending market 76% of every shorted Japanese stock was not a profitable short trade and 61% of every dollar shorted was not a profitable short trade. The most profitable Japanese short trades are:
Japan YTD MTM P\L
Ticker
Avg Short Int
YTD MTM P\L
P\L %
DISCO CORP
6146 JP
$1,161,161,278
$570,622,797
49.14%
NISSAN MOTOR CO
7201 JP
$852,156,946
$208,742,743
24.50%
ADVANTEST CORP
6857 JP
$573,220,125
$190,128,324
33.17%
TOYOTA MOTOR CORP
7203 JP
$2,796,196,244
$131,806,014
4.71%
SMC CORP
6273 JP
$572,101,963
$127,167,191
22.23%
FAST RETAILING CO LTD
9983 JP
$1,540,383,858
$113,186,859
7.35%
SEVEN & I HLDGS CO
3382 JP
$802,951,428
$112,093,045
13.96%
ISETAN MITSUKOSHI
3099 JP
$305,474,436
$109,983,498
36.00%
SOCIONEXT INC
6526 JP
$253,938,156
$104,585,226
41.19%
HITACHI LTD
6501 JP
$569,577,993
$102,073,183
17.92%
The least profitable Japanese short trades are:
Japan YTD MTM P\L
Ticker
Avg Short Int
YTD MTM P\L
P\L %
SOFTBANK CORP
9434 JP
$2,486,211,023
($439,260,762)
-17.67%
CHUGAI PHARMA CO
4519 JP
$813,174,114
($281,979,139)
-34.68%
MITSUBISHI HEAVY
7011 JP
$678,184,954
($210,383,663)
-31.02%
BRIDGESTONE CORP
5108 JP
$938,153,712
($210,094,807)
-22.39%
TOYOTA INDUSTRIES
6201 JP
$404,312,719
($186,504,310)
-46.13%
AEON
8267 JP
$789,320,086
($181,841,151)
-23.04%
MITSUBISHI UFJ FINANCIAL GRP
8306 JP
$2,147,847,709
($174,417,623)
-8.12%
NINTENDO CO LTD
7974 JP
$805,033,319
($168,388,154)
-20.92%
NOMURA RESEARCH INST
4307 JP
$664,694,773
($155,092,634)
-23.33%
MITSUBISHI CORP
8058 JP
$838,491,232
($147,916,267)
-17.64%
Total YTD MTM P\L
$115,654,892,600
($5,391,751,956)
-4.66%
Japanese short selling differs from worldwide short-side trading with the average Japanese short interest by stock of $31 million versus the worldwide average of $72 million and an average SI % Float of 4.84% versus the worldwide average of 5.05%. The average Crowded score for Japanese stocks is 31.63% versus the worldwide average of 34.89. There is less short exposure by security in the Japanese market than worldwide. The most Crowded Japanese shorts with over $25 million of short interest are:
Japanese Crowded & Squeeze Scores
Ticker
Crowded Score
Squeeze Score
KIMURA KOHKI CO LTD
6231 JP
90.00
100.00
TSUBURAYA FIELDS HOLDINGS INC
2767 JP
85.00
85.00
HEALIOS KK
4593 JP
80.00
100.00
SAKURA INTERNET INC
3778 JP
77.50
67.50
ISE CHEMICALS CORP
4107 JP
77.50
97.50
FP PARTNER INC
7388 JP
77.50
77.50
TRIAL HOLDINGS INC
141A JP
75.00
75.00
SHINKO ELEC INDU
6967 JP
75.00
55.00
KOKUSAI ELECTRIC CORP
6525 JP
72.50
92.50
KASUMIGASEKI CAPITAL CO LTD
3498 JP
72.50
62.50
GENDA INC
9166 JP
72.50
62.50
METAPLANET INC
3350 JP
70.00
80.00
NOMURA MICRO SCIENCE CO LTD
6254 JP
70.00
80.00
MA RESEARCH INSTITUTE HOLDINGS INC
9552 JP
70.00
80.00
Japan Average
31.63
34.61
Worldwide Average
34.89
39.83
Japanese shorts are not only less Crowded but also less Squeezable with an average Squeeze score of 34.61 versus the worldwide average of 39.93. Over the last thirty days Japanese shorts were down -1.24% on average versus a positive +0.05% return for worldwide shorts. But Squeezability has a recency bias with short sellers feeling shorter-term profits & losses more stringently than longer-term profits & losses. Japanese shorts are down -1.85% over the last seven days versus the worldwide average of -4.14%. Worldwide ex-Japan are getting relatively more squeezable due to their recent mark-to-market losses.
We measure Squeezability not only by looking at a securities Squeeze score but also the Crowded\Squeeze score spread. A Squeeze score over 70 and\or a spread of +20 tells us that a security has a higher-than-average squeezability factor. The most Squeezable Japanese stocks with over $25 million of short interest are:
Japanese Most Squeezable Stocks
Ticker
Short Interest
Crowded Score
Squeeze Score
Spread Score
TOYOTA INDUSTRIES
6201 JP
$623,733,853
32.50
82.50
50.00
DAINIP SUMIT PHARMA
4506 JP
$116,257,304
42.50
72.50
30.00
ISPACE INC
9348 JP
$69,325,920
55.00
95.00
40.00
Heartseed Inc.
219A JP
$30,658,706
55.00
85.00
30.00
ISE CHEMICALS CORP
4107 JP
$56,444,938
77.50
97.50
20.00
MITSUI ES CO LTD
7003 JP
$235,147,539
55.00
85.00
30.00
SQUARE ENIX CO
9684 JP
$203,661,139
27.50
57.50
30.00
NAMURA SHIPBUILDING
7014 JP
$124,155,968
52.50
72.50
20.00
AISIN SEIKI CO
7259 JP
$93,425,386
7.50
27.50
20.00
TOYOTA TSUSHO
8015 JP
$270,143,600
25.00
55.00
30.00
NINTENDO CO LTD
7974 JP
$794,440,959
20.00
40.00
20.00
JAFCO CO LTD
8595 JP
$40,158,853
22.50
52.50
30.00
SHIN-ETSU CHEMICAL
4063 JP
$137,540,769
7.50
27.50
20.00
TAIYO HOLDINGS CO LTD
4626 JP
$40,225,495
20.00
50.00
30.00
HEALIOS KK
4593 JP
$52,445,703
80.00
100.00
20.00
IBIDEN CO LTD
4062 JP
$125,893,018
17.50
37.50
20.00
TDK CORP
6762 JP
$235,888,538
15.00
35.00
20.00
KOKUSAI ELECTRIC CORP
6525 JP
$541,320,889
72.50
92.50
20.00
RECRUIT HLDGS CO LTD
6098 JP
$284,460,781
10.00
30.00
20.00
KIMURA KOHKI CO LTD
6231 JP
$83,918,856
90.00
100.00
10.00
METAPLANET INC
3350 JP
$212,359,476
70.00
80.00
10.00
TIMEE INC
215A JP
$54,189,374
30.00
50.00
20.00
TAISEI CORP
1801 JP
$112,854,220
12.50
32.50
20.00
RENOVA INC
9519 JP
$34,445,780
65.00
75.00
10.00
MITSUBISHI HEAVY
7011 JP
$604,892,445
15.00
35.00
20.00
TOKIO MARINE HLDG
8766 JP
$718,645,184
22.50
42.50
20.00
TAKASAGO THERMAL ENG
1969 JP
$39,680,624
10.00
30.00
20.00
NOMURA MICRO SCIENCE CO LTD
6254 JP
$96,573,751
70.00
80.00
10.00
INSTITUTE FOR QSHU PIONEERS OF SPACE
5595 JP
$34,855,272
45.00
75.00
30.00
CHUBU ELECTRIC POWER
9502 JP
$152,659,531
15.00
35.00
20.00
NEC CORP
6701 JP
$182,778,297
10.00
30.00
20.00
GNI LTD
2160 JP
$108,007,932
42.50
62.50
20.00
SHIMIZU CORP
1803 JP
$75,275,806
12.50
32.50
20.00
CAPCOM CO
9697 JP
$96,170,518
7.50
27.50
20.00
MA RESEARCH INSTITUTE HOLDINGS INC
9552 JP
$56,939,866
70.00
80.00
10.00
TSUBURAYA FIELDS HOLDINGS INC
2767 JP
$127,140,789
85.00
85.00
-
JINS INC
3046 JP
$30,810,791
15.00
35.00
20.00
While a higher Squeeze score does not guarantee a slew of buy-to-covers hitting the tape it does tell us that short sellers will probably not be looking to increase their exposure in a particular stock and may look for attractive exit points as they present themselves. A long investor should take this into consideration when choosing between stocks – better to be long in an unattractive short trade than an attractive one. And a short seller needs to raise these stocks higher on their radar as they never want to be the last short seller to exit their trade as stock prices continue to rise.
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The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.
