During the week ending October 5, foreign investors significantly increased their purchases of Japanese stocks. According to data from Japan's Ministry of Finance, foreign investors net bought Japanese equities worth 919.3 billion yen, approximately $6.16 billion, marking the largest weekly net purchase since April 13.
Data indicated that the yen weakened by about 4.4% against the U.S. dollar during the same period, which was the steepest weekly decline since December 2009. Statements from Japan's new Prime Minister, Shigeru Ishiba, suggesting that the Japanese economy was not ready for another Bank of Japan interest rate hike, alleviated concerns over potential rate increases, leading to a rapid depreciation of the yen. The weakening yen spurred increased interest from investors in Japanese exporters.
In the first half of this year, foreign investors net bought around 6 trillion yen of Japanese stocks. However, in the second half so far, they have sold about 5.42 trillion yen worth. Additionally, foreign investors net sold derivative contracts valued at approximately 604.4 billion yen, marking the third consecutive week of net selling in this category.
In the Japanese bond market, foreign investors net purchased long-term bonds worth 1.38 trillion yen, the largest weekly net purchase since September 14. They also bought about 50.3 billion yen of short-term bonds.
Conversely, Japanese investors acquired 696.7 billion yen of foreign bonds, following a net sell-off of 55.8 billion yen the previous week. Japanese investors also purchased 257.8 billion yen of foreign stocks, representing the largest weekly net purchase in four weeks.
