Japanese investors became net sellers of foreign stocks in April for the first time in four months, driven by escalating concerns over energy costs from the Iran conflict and broader inflation risks. Data from the Ministry of Finance, released on Wednesday, indicated a net divestment of 636.4 billion yen, approximately $4.04 billion. This marks the largest monthly net sales since October 2025, reflecting a cautious shift regarding overseas equities.
The investor caution aligns with a significant rise in global inflationary pressures. US consumer inflation climbed at its fastest rate in three years during April, with price hikes across food, services, rental, and airline sectors, according to Tuesday’s data from the US Labor Department. Japanese trust accounts pulled out 1.85 trillion yen from foreign stocks, marking their largest monthly net withdrawal since June 2025. Despite this, they invested 897.3 billion yen in foreign long-term bonds. Conversely, investment trust management companies and life insurers were net buyers of foreign stocks, committing 1.25 trillion yen and 333.1 billion yen respectively.
While stock sales intensified, the selloff in foreign bonds by Japanese investors eased in April to a three-month low of 219.2 billion yen. Earlier, a Bank of Japan report revealed that Japanese investors sold 4.95 trillion yen worth of US bonds and 1.02 trillion yen in European bonds during the first quarter. This included specific sales of 797.66 billion yen in French bonds and 307.65 billion yen in German bonds. The exchange rate used is $1 to 157.7000 yen.
