Foreign ownership of companies listed on Japan’s main small cap market quadrupled in the year to March in spite of falling stock prices as value funds went bargain hunting in the market shake-out after the Livedoor scandal.

The number of Jasdaq stocks held by foreign investors in March soared from 5.6 per cent of the market a year ago to a record high of 23.5 per cent, suggesting overseas funds regarded much of the market as undervalued.