Foreign Investors Flee Japanese Stocks Amid Yen Strength

Foreign investors have shifted their stance on Japanese stocks, reversing from a net inflow of ¥392.5 billion to a net outflow of ¥368.5 billion in the week ending August 7.

The sudden change marks one of the largest weekly reversals in recent months, according to data from the Japan Exchange Group.

Analysts point to a combination of factors behind the shift, including a stronger yen that can weigh on exporter profits and rising expectations that the Bank of Japan may adjust its yield curve control policy.

This change in foreign investment comes as Japanese equities have been a standout performer over the past year, supported by corporate governance reforms, a weak yen, and foreign buying.