Having suffered a record 3.7% loss on Monday amid market turmoil prompted by disappointing US jobs data and last week’s Bank of Japan rate hike, Japan-focused hedge funds bounced back with their best ever single-day returns, according to a report by Bloomberg.
The report cites data from the prime brokerage desk at Goldman Sachs as showing that the Japan manager group rose 3.6% intraday on Tuesday reversing the setback seen from the previous day.
Although the MSCI Japan Index dropped 12% on Monday, Japanese equities in Goldman’s prime book were only marginally net sold, suggesting hedge funds were not the primary drivers of the selling activity.
Hedge funds increased their exposure in Japan, with short sales surpassing long buys by almost two to one. Asia-focused managers also experienced a partial recovery, gaining 1.5% after a 2.4% decline the previous day.
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