Japanese individual investors, armed with $7 trillion in bank deposits, piled into shares trading at their cheapest valuations ever last month, even as the global credit crisis prompted overseas fund managers to sell out.
Individuals bought a record net ¥993 billion of stock last month, according to Tokyo Stock Exchange data released Friday. New accounts at SBI Securities Co. and Rakuten Securities Co., Japan's two largest online brokerages, were opened in October at double September's pace, the companies said Thursday.
The purchases came in a month when overseas investors dumped ¥1.07 trillion in shares, the most since March, exchange data showed. That selling dragged the Nikkei 225 stock average to 7,162.90 on Oct. 27, the lowest since 1982, giving it the cheapest valuations of any developed market. The gauge has rallied 20 percent since then.
"Individuals are the most clever out of any investor group, in my opinion," said Tomomi Yamashita at Shinkin Asset Management Co.
"Going forward, the individuals will provide a solid floor for the market and keep it from collapsing."