Record Foreign Outflows Roil Japanese Markets Amid Middle East Tensions

Japanese stocks experienced the largest weekly foreign fund outflow in two decades, with foreign investors offloading significant holdings amid surging oil prices due to the Middle East war. This sparked fears of reduced global growth. Dramatic foreign outflows were also seen in Japanese bonds. Meanwhile, Japanese investors increased foreign stock purchases.

Japanese stocks faced an unprecedented sell-off, as foreign investors withdrew the largest weekly fund outflow in two decades. Heightened by surging oil prices amid the Middle East war, this wave of selling reflects growing concerns over global economic performance.

The Ministry of Finance in Japan reported a staggering net sale of 4.45 trillion yen, marking the largest retreat since data became available in 2005. Alongside equities, Japanese bonds also encountered massive foreign outflows, totaling 6.81 trillion yen.

Amidst this tumult, Japanese investors demonstrated confidence in overseas equities, marking a sixth consecutive week of net foreign stock purchases. However, they continued shedding foreign bonds during this period.

(With inputs from agencies.)