Foreign investors have pulled out of Japanese stocks for the sixth consecutive week, driven by concerns over a stronger yen and caution ahead of the Bank of Japan’s monetary policy decision according to a report by Reuters. This marks the ninth weekly net selling by overseas investors in the past 10 weeks, according to data from the Ministry of Finance.
Between 15 and 21 September, foreign investors withdrew a substantial 1.93 trillion yen ($13.27 billion) from Japanese stocks. Despite net purchases of around 6 trillion yen in the first half of the year, these recent withdrawals have made foreigners net sellers of approximately 1.11 trillion yen worth of Japanese equities so far in 2024.
The yen surged to a 14-month high of 139.56 against the dollar last week but has since weakened by about 4 per cent. This came after the Bank of Japan decided to maintain steady interest rates, with no indication of an imminent rate hike. Analysts expect this could lead to increased foreign investment in Japanese stocks in the coming weeks.
On Friday, the Nikkei share average hit a two-month high of 39,297.59, boosted by a surge in semiconductor-related shares and a rally in global equities.
In the bond market, foreign investors offloaded a net 2.01 trillion yen worth of Japanese long-term debt, marking their biggest weekly net sale since 23 March. They also sold around 883.3 billion yen worth of short-term Japanese securities during the same period.
Meanwhile, Japanese investors bought foreign long-term bonds for seven of the past eight weeks, acquiring about 774 billion yen in total. They also purchased a net 53.8 billion yen worth of foreign short-term debt instruments. However, they sold a net 427.9 billion yen worth of foreign equities, marking their largest weekly net sale since 6 July.
Source: Reuters
