Foreign investors continued to pour capital into Japanese equities, marking the eighth consecutive week of net purchases through May 23. Ministry of Finance data showed Thursday a net investment of 1.08 trillion yen, equivalent to approximately $6.77 billion, in the week ending May 23. This figure represents a nearly 14% increase from the prior week’s 948.4 billion yen, primarily driven by easing oil prices and a strong rally in artificial intelligence-related shares due to robust demand outlooks.
The technology sector proved particularly attractive to these foreign inflows. Market sentiment was bolstered by Nvidia, a prominent technology company known for designing graphics processing units (GPUs) essential for AI, which last week forecast blockbuster demand for its flagship chips. AI investor SoftBank Group, a Japanese multinational conglomerate focused on tech investments, subsequently surged 17.62% during the week. Chip designer Socionext, a Japanese fabless semiconductor company specialising in system-on-chip solutions, also saw its shares rally by 12.26%. Year-to-date, foreign investors have collectively pumped nearly 11.7 trillion yen into Japanese stocks, significantly more than the roughly 742.1 billion yen in the same period last year.
Beyond equities, Japanese long-term bonds saw a net purchase of 1.35 trillion yen, reversing the 1.03 trillion yen outflows of the prior week, as a bond sell-off eased and higher yields attracted investors. Conversely, foreigners divested 2.22 trillion yen in short-term instruments, marking the largest withdrawal since March 28. Meanwhile, Japanese investors withdrew a net 358.7 billion yen from foreign equities, their third weekly net sale in four. They did, however, invest a marginal 10.3 billion yen in long-term foreign bonds, extending their buying streak to a fourth straight week.
