Foreign Investors Sell Japanese Stocks for Second Week amid Year-End Profit-Booking

Reuters

17:34 JST, December 7, 2023

Foreign investors sold Japanese stocks for the second consecutive week in the period ending Dec. 1, capitalizing on year-end profit-booking as Japanese equities experienced an extended rally throughout the year.

According to data from Japanese exchanges, overseas investors withdrew a net 405.02 billion yen ($2.77 billion) from stocks last week, after selling about 423.31 billion yen on a net basis the previous week.

They withdrew about 368.79 billion yen from cash equities, the biggest amount in a week since Sept. 22. Derivatives also saw about 34.73 billion yen worth of selling on a net basis.

The Nikkei hit a 33-year high of 33,853.46 on Nov. 20 but failed to surpass the closing level of 33,753.33 set on July 3.

Short-term investors turned cautious because of the resistance and booked profits, analysts said.

The yen’s rebound against the dollar last month also pressured Japanese exporters, potentially impacting their profits.

The Nikkei fell 0.58% last week, ending its four-week winning streak, while the broader Topix index dropped about 0.35%. The indexes have so far risen 28.2% and 26.2%, respectively, this year.

Foreigners have still accumulated about 6.17 trillion yen worth of Japanese stocks so far this year on a net basis, compared with about 3.14 trillion yen worth of net selling in the year-ago period.

Meanwhile, long-term Japanese bonds saw foreign outflows of 710.4 billion yen last week, after having received two weekly inflows in a row, data from Japan’s Ministry of Finance showed.

Overseas investors, meanwhile, poured roughly 3.73 trillion yen into short-term debt securities, logging their biggest weekly net purchase in seven months.

Japanese investors disposed of 560.2 billion yen of foreign equities last week, their biggest weekly net selling since July 14.

Domestic investors were, however, net buyers of 83.6 billion yen of foreign bonds last week in contrast to about 104.1 billion yen of net selling a week earlier. They secured 64.5 billion yen of long-term and 19.1 billion of short-term bonds.

$1 = 146.0900 yen