FOREIGN INVESTORS WITHDRAW FROM JAPANESE STOCKS AMID RECORD HIGHS
Foreign investors in Japanese stocks pulled back slightly last week after several weeks of strong buying. In the holiday-shortened week ending Feb. 22, they withdrew a net 2.83 billion yen ($19 million) from Japanese stocks, marking their first weekly sale in three weeks. In terms of cash equities, they ended a seven-week buying streak with withdrawals of about 78.65 billion yen on a net basis. However, they continued to purchase about 75.82 billion yen worth of derivatives contracts.
Despite the slight outflow of foreign capital, the Nikkei share average hit a record high of 39,426.29 on Tuesday, surpassing the peak of the bubble era in 1989. This surge was driven by a rally in the technology sector, corporate governance reforms, and a weaker yen. Both the Nikkei and the broader Topix index continued their upward trend for the fourth consecutive week, with the Nikkei rising by 1.6% and the Topix index adding 1.37% last week. On the other hand, overseas investors remained net sellers in the Japanese debt market for the second consecutive week, withdrawing about 642.1 billion yen and 19 billion yen from short-term and long-term bonds, respectively. This follows net disposals of 1.83 trillion yen and 521 billion yen, respectively, in the previous week.
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