LONDON, Aug 5 (Reuters) - Japan-focused hedge funds face

the steepest daily performance losses on Goldman Sachs' ( GS ) records,

the bank said in a note on Monday, following a global stock rout

sparked by a soft U.S. jobs report and last week's Bank of Japan

rate hike.

Monday's 12% slide in Japanese stocks led to "large

performance" draw-downs for stock pickers trading on the

fundamental values of company equities, said Goldman.

As of the Asia close, Japan-focused hedge fund managers were

down 7.6% from the last three trading sessions. Monday's loss of

3.7% was the largest single daily performance decline in

Goldman's records.

These past three trading sessions erased the entire yearly

gains for these hedge funds taking their performances tracked by

the bank to flat, Goldman said.

Stock markets tumbled on Monday, with Japanese shares at one

point exceeding their 1987 "Black Monday" loss, as fears of a

U.S. recession prompted investors to dump risk assets and wager

on Federal Reserve rate cuts to rescue growth.

FRIDAY FLOWS

Hedge funds, as of Friday, sold Japan-related assets at the

highest pace since COVID but exposure to the region did not

fall, as fleeing long positions they U-turned and added short

positions.

A short trade bets that the value of an asset will fall.

Index and exchange-traded fund products led two thirds of

the selling activity in Japan. Outside of this, tech and

industrial sector stocks were the most net sold on Friday, said

Goldman.

Just before the markets turned, during July, Japan saw the

highest influx of hedge fund trades in nine months, said the

bank. Gross total and net allocations to Japan remained, on

Friday, close to four-year highs, the bank added.