Foreign Investors Exit Japanese Stocks in Record Outflow, Shift Focus to Bonds

Foreign investors pulled out 1.18 trillion yen ($9.07 billion) from Japanese stocks last week, marking the largest outflow since September 2023

The withdrawal from Japanese stocks was accompanied by a notable sell-off in derivative contracts, with foreign investors selling a net 967.32 billion yen, the largest in nine weeks. 

Additionally, approximately 213 million yen was pulled from cash equities. 

This retreat from Japanese stocks follows a period of significant gains. The Nikkei index increased by 5.63% the week before, even reaching a new high.

In the bond market, however, foreign investment showed a different trend. Investors purchased net long-term Japanese bonds worth 842.2 billion yen last week, a stark contrast to the 3.89 trillion yen net selling observed the week prior. 

This suggests a shift in foreign investor interest towards Japanese bonds despite the overall retreat from equities.

The substantial moves in both the stock and bond markets reflect a dynamic period for Japanese investments, driven by changing expectations around economic policies and market conditions.

For more information, read the full article on Reuters.