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Long-term vision? A lack of animal spirits? Or simply poor English proficiency?

Whatever the reason, Japan’s throngs of retail investors seem reluctant to get too involved in the GameStop Corp. trading frenzy that has shaken markets worldwide.

The U.S. video game retailer so beloved of Reddit’s WallStreetBets saw less trading activity last week than the likes of C3.ai Inc. and Plug Power Inc., according to a ranking of the most-traded U.S. stocks on Japan’s market-leading online brokerage SBI Securities Co.

“Japanese investors are fairly tame,” according to Seiichi Suzuki, a market analyst from Tokai Tokyo Research Institute Co., who says retail traders today need logical reasons to invest. “If this was the 1980s, they’d be aggressively participating. But Japanese retail traders now work like institutional investors.”

A lack of risk-taking animal spirits is something that has plagued Japanese administrators ever since the collapse of the bubble economy of the 1980s. While the country has long been known for its currency-trading “Mrs. Watanabes,” retail participation in equities, even domestic stocks, pales in comparison to the United States.

As in many countries, interest in stock trading has been growing in Japan since the pandemic struck. A price war between online brokerages in 2019 drove commissions on U.S. shares down to zero, which has helped make them more attractive despite the currency risk. Buying of U.S. stocks can often be more convenient than domestic ones, with most Japanese stocks sold in lots of 100 shares. Even so, GameStop may be a bridge too far.

“GameStop is like an emerging market,” said Naoki Murakami, a long-time Japanese day-trader. When buying U.S. shares, Japanese investors prefer names like Amazon.com Inc., he says — stocks with name value, brand recognition and little risk of going under. That’s a contrast with the small-time investors in Korea and India where GameStop has become one of the favorite U.S. stocks lately.

“They only play the major names,” he says. “And there’s one last hurdle — English.”

Many Japanese investors struggle to make sense of English language earnings statements, Murakami says, much less WallStreetBet’s lexicon of “tendies,” “diamond hands” and “stonks going to the moon,” which have baffled even native speakers.

And while Reddit is among the most popular websites in the world, it has made little headway in Japan, unlike the likes of Twitter, where Japan is the second-largest market.

As a result, while the GameStop phenomenon has made waves among the business press, the reaction has often been one of befuddlement. A note from Nomura analyst Naka Matsuzawa tried to coin the term “Reddit Shock” to describe the events in U.S. markets, playing off familiar terms such as the 2008 financial crisis which is colloquially known as the “Lehman Shock” in Japan. All that has left the trading community in Japan looking on somewhat bewildered.

“Japanese retail investors don’t really go in for short-term trades on U.S. stocks,” says Tomoichiro Kubota of Matsui Securities. “And they don’t go in for shares that are a gamble.”

Another sign of a more limited risk appetite is lack of options trading on individual stocks. While Japan Exchange Group Inc. has been promoting options trading for a limited slate of about 200 stocks, it has seen little pickup among investors, and isn’t offered on the major online brokerages.

However, while Reddit investors may be relatively new to a long-term, low-interest-rate environment, Japan’s day traders have lived with it for decades. Traders are also used to the WallStreetBets group tactics, with so-called “locust” traders on online message boards used to swarming on prolific bets.

“Things are also changing,” Suzuki says, pointing to a surge in people trading shares on the domestic Mothers market of start-up stocks. “More young people are getting into the market. The U.S. might only be a little bit ahead.”

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