Japanese stocks see biggest weekly foreign inflow in four weeks

By Thomson Reuters Feb 16, 2024 | 1:43 AM

(Reuters) – Foreign investors increased their purchases of Japanese stocks last week as easing concerns over the Bank of Japan’s (BOJ) potential policy shift buoyed market sentiment. According to data from Japanese exchanges, foreigners accumulated a net 817.43 billion yen ($5.44 billion) of local stocks in the week to Feb. 9, marking their most substantial weekly net purchase since Jan. 12.

They purchased 451.06 billion yen of derivative contracts after two successive weeks of net selling, in addition to securing about 366.37 billion yen of cash equities. Last week, in a boost to investor optimism, BOJ Deputy

Governor Shinichi Uchida indicated that while the Bank of Japan is likely to end its purchase of risky asset, it will avoid raising interest rates rapidly when scaling back monetary support. The Nikkei surged 2.05% last week, marking its biggest gain since Jan. 12. On Friday, it closed at 38,487.24, positioning itself to potentially test the all-time high of 38,957.44 reached in December 1989. According to data from Japan’s Ministry of Finance, non-native investors remained net buyers of Japanese bonds for a second successive week, buying 893.2 billion yen worth of short-term and 175.9 billion yen worth of long-term debt securities.

Simultaneously, Japanese investors acquired long-term overseas bonds totalling a net 1.5 trillion yen, marking the biggest weekly net purchase in four . They also accumulated about 277.4 billion yen of short-term instruments.

Domestic investors also poured about 22.1 billion yen into foreign equities during the week, registering their return as net buyers for the first time in three weeks.

($1 = 150.1900 yen)

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Dhanya Ann Thoppil)