Foreign investors snap up Japanese stocks for bargains

By Thomson Reuters Apr 11, 2024 | 3:29 AM

(Reuters) – Foreign investors snapped up Japanese stocks in the week ended April 5, as they sought value opportunities following a substantial drop in late-March amid profit booking by domestic institutions.

They pumped in a net 829.45 billion yen ($5.42 billion) into Japanese equities during the week, the highest since Jan. 12 and a sharp reversal from net selling of about 1.18 trillion yen in the prior week, data from stock exchanges showed.

Meanwhile, domestic institutional investors pulled a net 334.8 billion yen out of Japanese stocks last week.

Domestic cash equity markets received 1.18 trillion yen on a net basis in overseas capital, the highest in a week since at least 2018. However, foreigners sold about 352.68 billion yen of derivative contracts.

Last week, the Nikkei shed 3.4%, its sharpest weekly fall since Dec. 2022 amid profit booking and market caution about potential intervention by Japanese authorities in the currency market.

A sell-off in Fast Retailing stocks on concerns over slowing domestic demand at its flagship Uniqlo brand also weighed on the market. Fast Retailing shares lost 6.32% during the week, the most since Jan. 2023.

Despite the recent pullback, the Nikkei still trades above a support line formed since Feb. 21, supporting bets of a potential rebound.

Foreigners sold 349 billion yen of long-term Japanese bonds, logging a second weekly net selling in three, data from the Ministry of Finance showed.

Japanese short-term debt securities, however, received a robust 4.39 trillion yen worth of foreign inflows during the week, the biggest amount since Jan. 5.

Japanese investors, meanwhile, purchased 346.4 billion yen of long-term foreign bonds in contrast to 1.66 trillion yen of net selling in the week before.

They, however, withdrew a marginal 3.1 billion yen out of short-term debt instruments in a third successive week of net selling.

Domestic players were also net sellers in overseas equities last week, with about 301.8 billion yen of net disposals.

($1 = 153.1200 yen)

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Varun H K)