Global market turmoil pushed Japan stocks into correction territory Thursday, raising questions over whether this is an attractive entry point for longer-term investors.
The Topix is down 11 percent from its six-year peak on September 25, while the Nikkei 225 is down 10 percent over. Both indexes slumped around 2 percent on Thursday, following the selloff in U.S. markets overnight amid intensifying concerns over a sputtering global economy.
"Stay short for now," Amir Anvarzadeh, analyst at financial services firm BGC Partners told CNBC on Thursday. "We see the current downtrend continuing for the next 1-2 months."
There are concerns that Japanese officials have stopped talking the yen down, he said, and until the yen finds a footing again, any bounce will be a "dead cat".
Earlier this month, Bank of Japan Governor Haruhiko Kuroda said the central bank is closely monitoring the exchange rate and Prime Minister Shinzo Abe said yen weakness is hurting small companies and households.
The yen has appreciated 2 percent against the U.S. dollar in the past week largely supported by safe-haven bids in the risk-off environment. The yen is inversely correlated with the Nikkei, which is heavy of exporters.