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Japanese stocks see first weekly foreign outflow in three

Published 02/01/2024, 04:52 AM
Updated 02/01/2024, 04:56 AM
© Reuters. A huge electric stock quotation board is seen inside a building in Tokyo, Japan, December 30, 2022. REUTERS/Issei Kato

(Reuters) - Foreign investors were net sellers of Japanese stocks in the week ended Jan. 26, reacting to indications that an end to the Bank of Japan's negative interest rates could be nearing.

These investors sold a net 574.94 billion yen ($3.92 billion) of Japanese stocks last week, their biggest weekly net disposal since Oct. 27, 2023, data from Japanese exchanges showed.

They net sold derivative contracts worth about 985.47 billion yen, the biggest amount since Oct. 6, 2023. Topix futures lead the outflows at approximately 904.56 billion yen.

Meanwhile, Japanese cash equity markets received about 410.52 billion yen worth of offshore funds, a fourth successive week of inflow.

The Nikkei lost about 0.6% last week after logging a 34-year peak of 36,984.51 as investors booked profits following the hawkish tilt by BOJ Governor Kazuo Ueda in a post-meeting news conference.

The broader Topix index also shed 0.5%, snapping a six-week gaining streak.

Data from Japan's Ministry of Finance meanwhile, showed that overseas investors also offloaded about 2.35 trillion yen of Japanese short-term bonds, the most since Dec. 29, 2023, and about 207.5 billion yen of long-term debt securities.

Conversely, Japanese investors were net buyers in both long-term and short-term overseas bonds, with purchases valuing 382.9 billion yen and 74.6 billion yen, respectively on a net basis.

Concurrently, they withdrew a net 55.2 billion yen out of foreign equity during the week as they broke a four-week-long buying streak.

($1 = 146.8200 yen)

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