Japanese stocks draw foreign inflow after three weeks of outflows

FOREIGN investors turned net buyers of Japanese stocks in the week to Oct 13, as a rally in Wall Street’s major indexes following dovish remarks from some Federal Reserve officials boosted appetite for beaten-down shares.

Data from Japanese exchanges showed foreign investors scooped up a net 787.39 billion yen (S$7.22 billion) worth of stocks last week, in their first weekly net buying since Sept 15.

Investors snapped up cash equities worth 455.75 billion yen and derivatives worth 331.64 billion yen.

Upbeat earnings report by Uniqlo brand owner Fast Retailing, also supported sentiment, with the stock surging 13.1 per cent, its highest weekly gain since late May 2020.

The Nikkei gained 4.26 per cent, while the Topix added 1.97 per cent last week, and both indexes snapped a three-week-long losing streak.

Japanese shares have, however, tumbled this week, on worries of a hawkish Federal Reserve after some robust US economic readings and mounting tensions in the Middle East.

Foreigners have channelled roughly 5.4 trillion yen into Japanese stocks so far this year, compared with net selling of about 4.14 trillion yen in the year-ago period.

Meanwhile, long-term Japanese bonds drew around 947.8 billion yen of foreign inflows last week, the highest in eight weeks. Foreigners, however, sold about 917.4 billion yen of short-term securities, data from Japan’s Finance Ministry showed.

Japanese investors poured about 178.6 billion yen into overseas equities, extending buying streak to a third straight week.

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They also secured about 794 billion yen worth of long-term foreign bonds, marking the biggest weekly net purchase since Sept 15, but sold about 46.1 billion yen worth of short-term debt instruments. REUTERS