Japanese Stocks Face Largest Foreign Outflow in Five Months

Japanese stocks experienced the largest foreign outflow in nearly five months, impacted by a stronger yen, rising inflation concerns, and uncertainties over U.S. tariff policies. The Nikkei share average fell to a five-month low. Meanwhile, Japanese long-term bonds saw net inflows, contrasting with offshore equities and foreign debt securities.

Japanese stocks encountered their largest foreign outflow in nearly five months, totaling 1.04 trillion yen, affected by a strengthened yen, intensifying inflationary concerns, and uncertainties surrounding U.S. President Donald Trump's tariff decisions. According to the Ministry of Finance, this marked the largest weekly net sale since September 2024.

The Nikkei share average tumbled to a five-month low of 37,084.44 on Friday, impacted by chip-related stocks. Nvidia's promising growth forecast failed to boost market sentiment. Despite the sell-off, Japanese long-term bonds managed to attract 438 billion yen in net inflows for the second consecutive week, while short-term bills faced 478.4 billion yen in outflows.

Japanese investors modestly increased their overseas equities by 19.7 billion yen, following a substantial 345.4 billion yen buy the week before. Conversely, they executed a net sale of 200.8 billion yen in long-term foreign debt securities, breaking a two-week buying streak.

(With inputs from agencies.)