Last week, foreign investors were large purchasers of Japanese shares, spurred by solid company profits and a general surge across global markets amid optimism that the Federal Reserve of the United States may stop its rapid interest rate hikes.
In the week that ended on November 10, according to data provided by Japanese exchanges, foreign investors acquired equities with a net value of 1.12 trillion yen ($7.40 billion), marking their most extensive weekly net purchasing since the week that ended on June 16.
Most of the investment capital amounted to around 1.04 trillion yen and was placed in futures. 78.3 billion yen worth of cash equity investments supplemented this.
In comparison to the same time last year, when foreign investors pulled out a net 4.07 trillion yen of their money from Japanese equities, the market has seen a net inflow of 5.96 trillion yen so far this year from outside investors.
On Thursday, the Nikkei (.N225) ended a three-day winning streak as investors elected to lock in profits following a dramatic surge in the previous session. A comeback in U.S. Treasury rates also weighed on mood, contributing to the decline in the market’s overall level of optimism.
During the same period, Japanese investors sold foreign equities abroad for 73 billion yen, becoming net sellers of foreign stocks for the first time in seven weeks.
It is illustrative of the trust that global investors have in Japan’s economic stability, diversified investment sectors, and the perceived comfort that stems from policies implemented by the Federal Reserve that this recent rise in foreign inflows into Japanese shares has demonstrated. As the structure of global finance continues to shift, Japanese stocks continue to shine as a beacon for potentially profitable investment possibilities, drawing in investors from all over the world.
Japan is an excellent place for foreign investors to put their money in an ever-changing global market. This is because of its strong economy, strategic sector growth, and perceived stability despite changes in Federal Reserve policy.