TOKYO, Sept 1 (Reuters) - The ratio of shares sold short in Japan hit a record high on Tuesday, as investors stepped up bets that the markets will fall further on concerns about a slowdown in China and possible U.S. rate hike later this year.
The ratio, which measures the amount of short-selling in the total selling, hit 41.0 pct, its highest ever.
Although a high short-selling ratio is generally considered a sign of excessive pessimism in the market, investors are not sure if the worst is over yet.
"They will be eventually bought back. But as you have seen, the short-selling ratio can stay high for quite some time," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.
"I suspect we could see more speculative selling in the near future and the Nikkei could fall below its low, hit last month."
The benchmark Nikkei average fell 3.8 percent to 18,165.69 on Tuesday, heading towards a six-month low of 17,714.30 hit last week. (Reporting by Tomo Uetake; Editing by Clarence Fernandez)