Bloomberg News

Record Rally Ends For Japanese Small Caps Amid Signs Shares Overheated

February 28, 2012

A measure of Japan’s smaller stocks ended its record winning streak amid speculation shares were overbought after a 30-day streak of advances that came as spending on disaster reconstruction boosted earnings.

Japan’s TSE Second Section Price Index (TSE2), a measure of smaller companies on the Tokyo Stock Exchange, dropped 0.1 percent to 2,379.16 at the 3 p.m. close of trading today in Tokyo. The gauge advanced 12 percent during a 30-day stretch of gains through yesterday, the longest series of increases ever, according to data compiled by Bloomberg going back to 1961.

The 14-day relative strength index for the measure was 95 today, above the 70 threshold that suggests to some traders that equities have been overbought.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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