Foreign investors continued their bullish stance on Japanese stocks in the week leading up to April 12, buoyed by a weaker yen and robust gains in chip-related equities.
Data from the Japanese Stock Exchange revealed that foreign investors amassed a net total of 829.05 billion yen ($5.37 billion) in Japanese stocks during the week to April 12, following a similar net purchase of 829.45 billion yen the previous week.
Moreover, foreign investors displayed renewed interest in derivatives, purchasing approximately 233.5 billion yen in net derivatives during the same period. This marked the first net purchase in five weeks, indicating a resurgence of foreign capital inflows into Japan’s cash market, totaling around 595.5 billion yen.
The surge in foreign investment was particularly evident in technology stocks, notably the chip sector, which bolstered the Nikkei index, driving a 1.36% gain in the Japanese stock market last week. Shares of Tokyo Electron soared by 6%, while LaserTech shares surged by approximately 9.5%.
Despite geopolitical tensions in the Middle East and profit-taking activities by domestic investors, the Nikkei index experienced a marginal decline of 3.65% over the week. However, the index rebounded by 0.31% on April 18, propelled by the recovery of chip stocks from early trading losses and gains in banking equities.
Shifting focus to the Japanese government bond market, data from the Japanese Ministry of Finance revealed a mixed picture of foreign investment activity. Foreign investors demonstrated a renewed interest in long-term government bonds, purchasing approximately 50.7 billion yen worth of securities last week, a reversal from the previous week’s net sales of 348.9 billion yen. Conversely, short-term government bonds experienced a net sell-off of 3.8 trillion yen, marking a reversal of the net buying trend observed in the preceding week.