In the week ending 5 July, foreign investors made significant investments in Japanese stocks, spurred by a market rally and positive outlook for corporate earnings in the latter half of the year. Exchange data revealed that overseas investors purchased Japanese stocks worth a net 916.05 billion yen ($5.67 billion), marking their largest weekly net purchase since 12 January.
Investors showed a strong preference for derivative contracts, acquiring around 732.36 billion yen worth, while net purchases of cash equities amounted to about 183.69 billion yen. This activity coincided with a substantial rise in the Nikkei share average, which jumped 3.36 per cent last week, achieving its best weekly gain since 22 March. The broader Topix index also advanced by 2.65 per cent.
Notably, the Nikkei reached an all-time high on Thursday, surpassing 42,000 points for the first time, while the Topix index set a record closing high at 2,929.17. This surge was supported by gains in U.S. megacap growth stocks, which in turn boosted Japanese technology shares. Among these, SoftBank Group soared by 8.04 per cent, and Advantest, a semiconductor testing equipment maker, rose by 3.2 per cent.
On the other hand, foreign investors retreated from Japanese bonds for the fourth week in a row. They sold long-term bonds worth a net 228.8 billion yen and short-term instruments totalling 876.9 billion yen, according to Ministry of Finance data. Meanwhile, Japanese investors reversed a two-week selling streak in overseas debt markets by purchasing a net 237.7 billion yen in long-term foreign bonds and about 96.6 billion yen in short-term securities.
Despite this, Japanese investors withdrew a net 555.6 billion yen from foreign equities, marking their largest weekly net disposal since 31 May.
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