Foreign Investors Shed Japanese Stocks after Nikkei Hits 33-yr Peak, Turn to Bonds

Reuters

17:35 JST, November 30, 2023

Foreigners were net sellers of Japanese stocks in the week ended Nov. 24, booking profits after a surge in the market drove the Nikkei share average to its highest level in more than three decades.

Data from Japanese exchanges showed foreign investors sold a net 423.31 billion yen ($2.88 billion) worth of stocks last week, their first weekly net selling since Oct. 27.

They sold derivatives worth a net 421.86 billion yen and exited a marginal 1.01 billion yen of cash equities.

Last week, the Nikkei faced strong resistance after it hit a fresh 33-year high of 33,853.46, prompting some investors to book profits. However, the index is up about 8% so far this month.

A rebound in the yen against the dollar this month has also put pressure on Japanese exporters, potentially dampening their profit outlook.

Foreigners have still poured a massive 6.57 trillion yen into Japanese stocks so far this year on a net basis, compared to about 2.36 trillion yen worth of net selling last year.

Overseas investors, meanwhile, secured about 864.1 billion yen of long-term Japanese bonds, logging a second straight week of net purchase, data from Japan’s Finance Ministry showed.

They exited roughly 2.57 trillion yen of short-term debt securities on a net basis in a sharp reversal to around 2.05 trillion yen of purchases a week ago.

Japanese investors pulled 209.8 billion yen out of foreign equities last week after about 120.7 billion yen of net buying in the prior week.

Domestic investors were also net sellers of roughly 84.5 billion yen of long-term and 19.8 billion yen of short-term overseas bonds last week.

$1 = 146.9500 yen