(Updates with hedge funds overall positioning and performance)

By Carolina Mandl

NEW YORK, Aug 9 (Reuters) - Hedge funds added bearish

bets in Japanese stocks at the fastest pace in over five years

for a week between Aug. 2 and Aug. 8, as the Nikkei on

Aug. 5 faced the worst day for the index since Black Monday in

1987, Goldman Sachs ( GS ) said in a note on Friday.

The bank said equity long/short hedge funds added 1.7

shorts, or bets stocks will fall, for each long position sold

for the week between Aug. 2 and Aug. 8.

Japanese stocks collapsed on Monday amid a sell-off

triggered by economic concerns and the unwinding of a popular

yen trade that was financing investment in stocks, which

reverberated across markets worldwide.

Portfolio managers net sold Japanese stocks in four of the

five-trading day week finished on Aug. 8, as Tuesday was the

only day they more bought than added shorts.

Goldman Sachs ( GS ) said hedge funds' net exposure to Japanese

equities was on Thursday at 4.8%, down from 5.6% a week earlier.

As the turmoil spread overseas, hedge funds for the fourth

consecutive week continued bearish on global equities, adding

more short positions, the bank added.

One of the biggest prime brokers worldwide, Goldman Sachs ( GS )

tracks the flows of its hedge fund clients to report on trends.

Global equity fundamental long/short hedge funds were down

1.34% for the week amid the market rout, while systematic

long/short funds rose posted gains of 0.77%.