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EWJ, the iShares MSCI Japan ETF, heads into mid-October with short sellers unwinding positions at a meaningful pace, even as options traders remain structurally cautious on the fund.
The most notable development this week is how quickly the short position has retreated. Short interest fell 17% over the past week to 3.6% of the float, with Wednesday's reading of roughly 6.9 million shares the lowest level in the 30-day window. That unwind has been rapid: shares short peaked near 11.2 million on September 23 before dropping almost continuously. The driver of that retreat is visible in the borrow market. Availability has expanded sharply, with roughly 77.4 million shares now available to lend against the 6.9 million currently out, putting availability at 579% of short interest. A week ago that ratio was closer to 338%. With ample supply and borrow costs running at just 0.97% annually, there is no friction keeping shorts in place. The ORTEX short score has tracked the unwind closely, falling from 44.7 on September 28 to 37.5 today, moving from neutral toward the low-conviction range.
Options positioning paints a different picture. The put/call ratio is running at 2.03, essentially in line with its 20-day average of 2.01, and well above where it spent most of August and early September when readings were consistently in the 1.6 to 1.9 range. The shift happened around September 22, when the PCR jumped above 2.0 and has held there since. That structural skew toward puts is not a panic signal, the z-score is barely above zero, but it reflects a persistent preference for downside protection that predates and outlasts the short-selling activity. The 52-week high for the PCR is 3.19, so current levels are elevated relative to history but not extreme.
Institutional ownership adds context to the flow. BlackRock, the fund's parent and dominant holder, added 10.5 million shares as of its September 30 filing to bring its stake to 27.4 million shares, or about 12.5% of the ETF. That addition, filed through the 13G/A process, is largely a mechanical function of BlackRock's internal management of the fund rather than a directional bet. JPMorgan and Morgan Stanley each hold roughly 11% and 9.6% respectively, with the latter adding 1.4 million shares in its June 30 filing. BMO cut its position by 1.3 million shares over the same period, the largest proportional trim among the top fifteen holders. Analyst and valuation data for EWJ is not current and has not been used here.
The ETF itself closed at $98.32 on Wednesday, down 1% on the day but up 0.9% on the week. EWJ's earnings history, which reflects the quarterly index rebalancing events, shows modest moves: a 4% one-day gain following the May 2026 event and near-flat reactions to the two prior prints. There is no scheduled earnings event flagged for the fund.
What to watch is whether the short-side retreat continues now that availability is loose and borrow cost is low, or whether the persistent options skew toward puts signals that macro-level caution on Japanese equities reasserts itself as a new short-selling wave once the current unwind completes.
See the live data behind this article on ORTEX.
Open EWJ on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
