Foreign Binge: Unprecedented Surge in Japanese Stock Investments
Japanese stocks saw record foreign investments as expectations rose that Iran war negotiations would conclude successfully. The Nikkei 225 hit a new high amid optimism from the Trump administration. Seasonal shifting of holdings and appealing bond yields also influenced the trend in foreign investments.
Japanese equities reached a new milestone as foreign investment surged, setting a record in the week through April 11. This influx reflects increasing optimism about possible successful negotiations to end the Iran war, with cross-border investors acquiring a net 3.94 trillion yen ($24.87 billion) in Japanese stocks.
The Nikkei 225 soared by approximately 16.6% in April, achieving a new record of 59,569.25, buoyed by positive sentiments from the Trump administration toward resolving the conflict with Iran. This marks a significant turnaround from the 7.37 trillion yen of net sales recorded in March, as foreign investors poured in about 6.9 trillion yen over the last two weeks.
Analysts attribute part of the investment boom to seasonal patterns, where holdings shift from Tokyo to offshore entities in March for dividend entitlements and voting rights, only to move back in April. Additionally, Japanese long-term bonds have attracted increasing foreign interest due to higher yields, contributing to two consecutive weeks of net foreign purchases.
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