The balance of shares bought on credit — a sensitive indicator of investor sentiment — rose for the second straight week last week.
The outstanding balance of long margin positions stood at 1.28 trillion yen at the end of the holiday-shortened week, up 21.93 billion yen from a week earlier, according to a weekly industry report.
Share prices have been on the decline in recent weeks, enticing investors to return to the market in search of potential gains.
They opted for high-technology issues that had plunged, counting on a rebound in prices.
The balance of shares sold short, on the other hand, fell for the third week.
The balance of short selling fell 44.99 billion yen to 862.45 billion yen, the lowest since Oct. 19.
As a major factor behind the falling short positions, brokerage officials cited tightened controls on short sales, aimed at preventing abuses of heavy short selling with the intention of driving down prices of targeted shares.
The long-short ratio, which has been frequently been dropping below one-to-one parity in recent months, stood at 1.48 at the end of last week, up from 1.38 a week earlier.
In a related development, a new rule put into effect at the start of trading this week is requiring short sellers to pay interest on borrowed shares.
A majority of brokers are now charging interest at an annual rate of 1.15 percent, which translates into a daily rate of 30 yen plus for each 1 million yen.
According to a separate report, short sellers borrowed 99.46 million shares on Tuesday when the new rule went into effect, compared with an average daily volume of slightly more than 80 million shares for all of April.
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