Foreign investment in Japanese stocks surged during the week ending October 5, driven by a weakened yen following dovish comments from Prime Minister Shigeru Ishiba, which heightened interest in local exporters.
According to data from the Finance Ministry, foreign investors net purchased Japanese stocks worth 919.3 billion yen (approximately $6.16 billion), marking the largest weekly net acquisition since April 13.
The yen experienced a significant decline of about 4.4% against the dollar last week, its steepest drop since December 2009, amid reduced concerns over potential interest rate hikes. Ishiba’s remarks indicated that Japan is not currently in a position for further rate increases, contributing to the yen’s depreciation.
Despite the recent influx, foreign investors have withdrawn approximately 5.42 trillion yen from Japanese stocks in the second half of this year, following net purchases of about 6 trillion yen in the first half.
In the bond market, foreign investors made a notable return, acquiring a net 1.38 trillion yen in long-term securities, the largest weekly net purchase since September 14. Additionally, they invested approximately 50.3 billion yen into short-term instruments.
Meanwhile, Japanese investors turned to foreign bonds, purchasing 696.7 billion yen worth after a previous week of net selling amounting to 55.8 billion yen. However, they sold off 138.7 billion yen in short-term debt securities. Japanese investors also acquired 257.8 billion yen in foreign equities, marking their largest weekly net purchase in four weeks.
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