china’s momandpop investors are rushing to buy japanese equity products as the stock market at home shows little sign of a revival some chinese exchangetraded funds that track the nikkei 225 index saw their assets more than double in may according to an analysis by mizuho securities co the japanese benchmark rose 7 that month to reach a threedecade high a feat that contrasts with a 57 slump in china’s csi 300 index “japanese equities are attracting attention in the chinese market as they rally to new highs which is driving higher inflows into japanese equity etfs” strategists shenshen wang and masatoshi kikuchi wrote in a june 7 note “we expect the correction for chinese stocks to accelerate the flow of funds into japanese stocks” the asset under management for the china amc nomura nikkei 225 etf surged nearly 300 from endapril to 213 million yuan 298 million while that for e fund nikko asset management nikkei 225 etf jumped 236 to 171 million yuan according to the note both funds have “surged on investment from retail investors” the strategists said china’s slowerthanexpected economic recovery and tensions with the us have frustrated investors the csi benchmark has erased all its gains for the year while japan’s stocks buoyed by a revival of inflation and improving corporate governance have posted doubledigit gains in one of the world’s best performances for 2023 the strategists note that japan’s efforts to encourage firms to achieve fair value is likely wooing chinese investors given that stateowned enterprises with low valuations have also become a hot trade at home