Foreign Investors Boost Japanese Stock Purchases

(Reuters) – Foreign investors increased their purchases of Japanese stocks in the week ended Oct. 5, as the yen weakened following Prime Minister Shigeru Ishiba's dovish remarks, boosting appetite for local exporters.

Foreigners acquired Japanese stocks worth 919.3 billion yen ($6.16 billion) on a net basis during the week, according to Finance Ministry data, marking their largest weekly net purchase since April 13.

The yen fell about 4.4% against the dollar last week, the most significant decline since December 2009. This drop followed easing worries about rate hikes after Ishiba stated that Japan is not in an environment for additional rate increases.

Despite this, foreigners have divested approximately 5.42 trillion yen worth of Japanese stocks in the second half of this year, following about 6 trillion yen in net purchases in the first half.

Exchange data indicated that foreigners invested about 395.55 billion yen into Japanese cash equities but continued to be net sellers of derivative contracts for a third consecutive week, with around 604.4 billion yen in net sales.

In the Japanese bond market, foreigners net purchased 1.38 trillion yen worth of long-term securities, the largest weekly net purchase since Sept. 14. They also invested about 50.3 billion yen into short-term instruments.

Japanese investors purchased 696.7 billion yen worth of foreign bonds after 55.8 billion yen in net selling during the previous week. However, they sold 138.7 billion yen worth of short-term debt securities.

Moreover, Japanese investors acquired 257.8 billion yen in foreign equities, marking their largest weekly net purchase in four weeks.

> ($1 = 149.2500 yen)