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Less than a year after Japan backtracked on a controversial decision to restrict short sales of Japanese stock, hedge funds are edging into the country.
Unlike mutual funds, hedge funds can place bets that stocks will fall by shorting stock. And as long as it's legal, Japan is a short- seller's paradise. While Japan has tried to turn its ailing economy around by becoming more Americanized, many companies have refused to make the restructuring changes necessary to compete in today's global marketplace, and their stocks have tanked.
"We have not seen the rash of bankruptcies that we should see. There is a lot of dead wood still being supported by the Japanese system," said Geoff Bennett, a partner at the San Francisco-based hedge fund Windham Pacific...