Japan Also Considering Banning Short Selling

Posted by Bull Bear Trader | 10/28/2008 07:26:00 AM | , | 0 comments »

Japan is the latest country to consider trying to stabilize its markets by banning short selling (see MarketWatch article). The move is being considered after the Nikkei 225 has fallen to its lowest level in 26 years. While potentially propping up the market, the long-term consequences of limiting information, hampering risk management, reducing liquidity, and prevent overall market efficiency may prevent the Japanese markets from reversing anytime soon what has become a generational decline in the Nikkei.