Japan equity quant memo

Research evidence excerpt

Japan equity quant memo

Global Markets Research

23 June 2026Japan equity quant memo

EQUITY: EQUITY QUANTITATIVE RESEARCH

Research Analysts

Asia trip report Japan quantitative research

Makoto Furukawa - NSC

Lively discussions about what would trigger an end to the momentum- makoto.furukawa@nomura.com

driven market, AI-related stocks versus other stocks +81 3 6703 1174

Shin Nishioka - NSCWe had the opportunity to meet with a total of 38 institutional investors in Asia (Hong

shin.nishioka@nomura.com

Kong and Singapore), including group meetings, over 15–19 June. Below, we summarize +81 3 6703 3948

investors' reactions and the main points of discussion.

Shunta Tachinaka, CFA - NSC

Long/short and market-neutral investors look left behind by series of major index shunta.tachinaka@nomura.com

gains driven by squeezes on the short side +81 3 6703 1212

This visit coincided with Japanese equity indices reaching record highs, but long/short

fund and market-neutral fund managers told us that individual stock volatility was elevated

and risk control was proving difficult. While recent performance has been reasonably

good, there have been many occasions when stocks that they have been shorting from a

risk control perspective, particularly within the same sector, have risen sharply during

overall risk-on phases, forcing them to cover these short positions, and some investors

asked us for our candid opinions about how they should manage their short positions.

Investors broadly shared the overall outlook for a market driven by rises in AI-related

stocks, and few expressed any concerns about overheating in the momentum factor. One

opinion we heard, however, was that given the current high volatility, neither a continued

move upward nor a sharp correction would be welcome at this stage.