Foreign investors snap up Japanese stocks for bargains

Bengaluru — Foreign investors snapped up Japanese stocks in the week ended April 5, as they sought value opportunities after a substantial drop in late-March amid profit booking by domestic institutions.

They pumped in a net ¥829.45bn ($5.42bn) into Japanese equities during the week, the highest since January 12 and a sharp reversal from net selling of about ¥1.18-trillion in the prior week, data from stock exchanges showed.

Meanwhile, domestic institutional investors pulled a net ¥334.8bn  out of Japanese stocks last week.

Domestic cash equity markets received ¥1.18-trillion on a net basis in overseas capital, the highest in a week since at least 2018. However, foreigners sold about ¥352.68bn of derivative contracts.

Last week, the Nikkei shed 3.4%, its sharpest weekly fall since December 2022 amid profit booking and market caution about potential intervention by Japanese authorities in the currency market.

A sell-off in Fast Retailing stocks on concerns over slowing domestic demand at its flagship Uniqlo brand also weighed on the market. Fast Retailing shares lost 6.32% during the week, the most since January 2023.

Despite the recent pullback, the Nikkei still trades above a support line formed since February 21, supporting bets of a potential rebound.

Foreigners sold ¥349bn of long-term Japanese bonds, logging a second weekly net selling in three, data from the ministry of finance showed.

Japanese short-term debt securities, however, received a robust ¥4.39-trillion worth of foreign inflows during the week, the biggest amount since January 5.

Japanese investors, meanwhile, purchased ¥346.4bn of long-term foreign bonds in contrast to ¥1.66-trillion of net selling in the week before.

They, however, withdrew a marginal ¥3.1bn out of short-term debt instruments in a third successive week of net selling.

Domestic players were also net sellers in overseas equities last week, with about ¥301.8bn of net disposals.

Reuters