Foreign Investment in Japan's Debt Securities Surges After Selling Streak

A three-week selling trend was halted last week when foreigners purchased Japanese debt securities valued at around 227.5 billion yen. Long-term bonds worth 154.8 billion yen and short-term instruments worth 72.7 billion yen were seized by foreign investors. At the same time, Japanese investors made a net purchase of overseas stocks totaling 325.1 billion, marking the fourth consecutive week.

Taking advantage of 2024 gains and trying to lower risks in the face of an abnormally lengthy market closure, foreign investors net sold Japanese stocks in the week ending January 4. After net accumulations of almost 562.7 billion yen the week before, foreigners sold a net 74 billion yen ($468.30 million) worth of Japanese stocks during the week.

In the first half of 2024, they bought around 1.23 trillion yen worth of Japanese stocks, while in the second half, they sold about 4.77 trillion yen worth of shares. With a 19.22% rise last year, the Nikkei index achieved its second-best yearly performance in 11 years. However, when investors started locking in profits after the previous gain, the index fell 1.15 percent this week after trading resumed. However, they sold off long-term debt securities worth a total of 331.8 billion yen and short-term debt securities worth 4.9 billion yen, withdrawing from foreign bonds for the third consecutive week.