Foreign Investors Flee Japanese Stocks Amid Yen Intervention Concerns

Japanese stocks have seen a decline in foreign investor interest for a second consecutive week due to concerns over yen intervention. The Bank of Japan's desire for a stronger yen has increased the US dollar value of foreign investors' Japanese assets, but reduced their purchasing power.

According to data from Japan's Ministry of Finance, foreign investors were net sellers of Japanese stocks worth 368.5 billion yen (US$2.31 billion) through August 8. This follows a similar trend in the previous week, where they sold about 392.5 billion yen.

The intervention in currency markets has led to the yen touching a nearly three-month high of 155.21 per dollar last week. It was last trading at 159.43 per dollar. The Nikkei rose 1.93% last week, largely due to gains in US technology stocks and AI-related shares.

Despite this, Japanese long-term bonds saw a modest foreign outflow of 58.7 billion yen, while short-term bills attracted 215.9 billion yen in foreign inflows. Meanwhile, Japanese investors purchased a net 963.5 billion yen of foreign stocks and a net 1.63 trillion yen of foreign long-term bonds.