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Foreign investors withdraw from Japanese stocks amid record highs

Published 02/29/2024, 02:40 AM
Updated 02/29/2024, 02:46 AM
© Reuters. Passersby walk past a screen displaying the Japanese yen exchange rate against the U.S. dollar outside a brokerage in Tokyo, Japan February 16, 2024.  REUTERS/Issei Kato/file photo
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(Reuters) - Japanese stocks experienced a slight outflow of foreign capital last week, following a series of robust purchases in previous weeks.

According to exchange data, in the holiday-shortened week ended Feb. 22, foreigners withdrew a net 2.83 billion yen (about $19 million) out of Japanese stocks, marking their first weekly sale in three weeks.

In cash equities, they ended a seven-week buying streak with withdrawals of about 78.65 billion yen on a net basis. On the contrary, they still purchased about 75.82 billion yen of derivatives contracts.

The Nikkei share average hit a record high of 39,426.29 on Tuesday, surpassing the 1989 bubble-era peak, driven by a tech rally, corporate governance reforms, and a weaker yen.

Both the Nikkei and the broader Topix index continued their upward trend for the fourth consecutive week.

The Nikkei jumped 1.6% last week while the broader Topix index added 1.37%.

Meanwhile, data from the Ministry of Finance indicated that overseas investors remained net sellers in the Japanese debt market for the second successive week.

They withdrew about 642.1 billion yen and 19 billion yen, respectively, out of short-, and long-term bonds on a net basis in the week to Feb. 22, after net disposals of 1.83 trillion yen and 521 billion yen, respectively, in the previous week.

Simultaneously, Japanese investors sold a net 257 billion yen worth of long-term foreign debt securities, extending net selling into a second successive week. They, however, purchased about 14.7 billion yen of short-term instruments.

© Reuters. Passersby walk past a screen displaying the Japanese yen exchange rate against the U.S. dollar outside a brokerage in Tokyo, Japan February 16, 2024.  REUTERS/Issei Kato/file photo

For foreign equities, Japanese investors remained net buyers for the third week in a row, securing stocks of about 225.9 billion yen on a net basis.

($1 = 149.7200 yen)

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