Japanese Investors Sell Foreign Stocks Following U.S. Record Gains

In an attempt to profit from strong gains in global equities, especially as U.S. stocks hit all-time highs; Japanese investors sold foreign stocks for the second consecutive month in November.

Japan's Ministry of Finance reports that these investors net sold 1.22 trillion yen ($8.12 billion) worth of foreign stocks last month after making net withdrawals of almost 2.37 trillion yen the month before.

For the third consecutive month, Japanese trust accounts sold overseas stocks for a net 1.33 trillion yen. In the meantime, investment trust management firms bought the most shares in three months, totaling 550.5 billion yen.

 Barclays said the desire to rebalance portfolios after a strong performance in U.S. stocks probably led to the large net sales of trust accounts, while the high purchases of investment trusts were probably motivated by revived interest in new NISA-linked investment flows.

The goal of the Japanese government's tax-free stock investing program for people, known as NISA (Nippon Individual Savings Account), is to convert the trillions of yen that families keep in cash into stock market investments.

The Bank of Japan said that, as of October, Japanese investors had sold a net 1.33 trillion yen worth of U.S. stocks.They also sold off 162.2 billion yen worth of British and European stocks during that time, for a total of 412 billion yen.

Ministry of Finance data revealed that domestic investors extended net sales into a second consecutive month in November, selling a net 432.8 billion yen worth of debt securities.