After the worst start to a year on record, Japanese stocks are approaching levels that in the past have proved to be springboards to recoveries.
The rout that's erased more than $300 billion from Japanese equities in 2016 sent bearish bets to historic levels and pushed valuations down 21 percent from last year's highs. A gauge of relative strength in the Topix index has dipped below a key level, and other technical indicators are flashing bullish signals. Nomura Holdings Inc.'s Shoko Tani is still waiting for stocks to hit bottom.
"No matter what technical measures you take, they all point to a rebound," says Tani, chief technical analyst, equity research, at Nomura. "But it hasn't happened."