The nation's cheapest stocks are proving anything but bargains.

Unlike in the U.S., where high-valuation shares are being punished, in Tokyo it's companies trading at less than the value of their net assets that are falling the fastest. Investors are dumping banks, insurers, shippers and steel producers as a global selloff deepens, while the nation's most expensive equities are relative bright spots.

"Yes, we're at a cheap level, but if you think about the risks, investor appetite just isn't there," said Yoshihiro Okumura, a general manager at Chiba-Gin Asset Management Co. in Tokyo. "Globally we're seeing higher volatility, and that needs to calm down before we start thinking about what to buy. Right now we're not in a Japan-specific environment."