The Nikkei 225 fell sharply by 1.72%, leaving the broader market dominated by selling. Hedging demand swelled during the decline, with notable inflows into bear ETFs.
The Nikkei 225 fell 1.72% from the previous day, while the TOPIX declined 1.82%, with both major indexes moving lower. With selling prevailing across the market, investors appeared to prioritize risk aversion.
A range of index-linked bear ETFs and Nikkei Double Inverse ETFs rose, reportedly indicating increased contrarian trading aimed at profiting from the decline.
The article points to a period of strengthening hedging demand during the market downturn and expresses the view that upside is likely to remain constrained even during rebounds.
Market participants are cautioning that volatility may remain elevated, and some believe additional hedging demand could emerge depending on how the indexes perform going forward.