(Reuters) – Japanese investors increased their holdings in foreign stocks, boosted by a benign U.S. core inflation report that fueled expectations of Federal Reserve cuts and boosted global shares, while a strong yen also boosted domestic purchasing power.
They poured a net 489.8 billion yen ($3.13 billion) into overseas stocks for the sixth straight week through Jan. 18, their second-biggest weekly net purchase since Sept. 7, 2024, according to Japan’s Finance Ministry data.
Analysts noted that investment in foreign stocks was also boosted by increased inflows into Nippon’s new Individual Savings Account (NISA) program, a tax-free investment scheme, and expected such investment to continue until March.
US core inflation data for December last week reported a rise of 3.2%, slightly below the forecast of 3.3%. Strong fourth-quarter earnings from majors such as JPMorgan, BlackRock (NYSE: ) and Goldman Sachs lifted 2.56%, marking the biggest weekly gain since Nov. 8, 2024.
Japanese market participants also acquired a net 1.01 trillion yen in foreign debt securities, the most in a week since Nov. 9. They invested 819.3 billion yen in long-term bonds and 194.2 billion yen in short-term notes.
At the same time, Japanese stocks witnessed marginal overseas outflows of 66.1 billion yen last Sunday, in contrast to inflows of 259.1 billion yen in the previous week.
the stock average hit a 1-1/2-month low of 38,055.68 last week, weighed down by a stronger yen and investor caution ahead of US President Donald Trump’s inaugural address.
The Nikkei, however, is up nearly 3.5% so far this week, buoyed by SoftBank ( TYO: ) Group and other tech stocks, as Trump announced private sector investment of up to $500 billion to fund artificial intelligence infrastructure.
Foreign investors bought a net ¥876.1 billion in Japanese long-term bonds, the biggest purchase in six weeks, while they also added a net ¥1.33 trillion in the value of short-term bonds last week.
($1 = 156.4100 yen)
