Foreigners Turned Sellers of Japan Shares After 12 Straight Weeks of Purchases

Yomiuri Shimbun file photo
Tokyo Stock Exchange

TOKYO (Reuters) — Foreign investors turned net sellers of Japanese equities after 12 straight weeks of purchases that helped propel shares to three-decade highs, official data showed.

Foreigners sold net shares worth 543.8 billion yen ($3.77 billion) in the week through June 24, according to capital flows data from the Finance Ministry.

Overseas investors had been net buyers of Japanese stocks every week since the end of March, snapping up a cumulative 9.9 trillion yen in equities.

Japan’s benchmark Nikkei share gauge has soared 21% over the past three months, outpacing global indexes, driven by a boom in chip-related companies and inflows into trading houses after billionaire investor Warren Buffett said he was adding to investments in the sector.

The Nikkei rose for a second straight session on Thursday, recovering from a steep four-day selloff. Earlier this month, the gauge touched 33,772.89, a level not seen in 33 years.

“The data confirms that there was profit taking by foreign, short-term investors,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui DS Asset Management.

“These investors tend to just follow trends, so I’m not sure of the timing of when they might resume buying, but I’m sure there are a lot of long-term investors who are considering carefully about increasing equity allocations.”

There is still upside potential in the Nikkei, with the index potentially rising to 35,000 by the year end, he added.

Meanwhile, Japan’s Ministry of Finance data showed that non-native investors were net sellers of long-term Japanese bonds for a second straight week, with disposals of about 560.9 billion yen.

On the other hand, Japanese investors added 155.6 billion yen worth of long-term overseas bonds to their portfolios in a seventh straight week of net buying.

They also remained net buyers in foreign equities for a second straight week, with 70.4 billion yen worth of net purchases.