Korean Investors Flee Japan Stocks Amid Nikkei Decline and Yen Weakness

Korean investors are rapidly pulling their money out of Japanese stocks as the Nikkei 225 index has fallen more than 10% from last month's peak and the won has plummeted against the yen. According to the Korea Securities Depository, Korean investors in Japanese stocks net sold 44.4 million dollars (about 65.1 billion won) worth of Japanese shares this month through the previous day. This represents a 47% increase from last month's net selling of 30.21 million dollars.

The primary reason for this withdrawal is the correction in global artificial intelligence and semiconductor shares. Shares of Japanese NAND flash maker Kioxia Holdings have halved in value, closing down 9.49% at 56,010 yen on the day. However, securities analysts point to the recent plunge in the yen as the main cause of the large-scale net selling.

The won-yen exchange rate has fallen below 900 won for the first time in one year and eight months, with currency losses estimated to have reached 3 to 7%. Bond investors, who hold investments with a long-term nature, are believed to have suffered greater losses from the weak yen. The 'iShares 20+ Year US Treasury Bond JPY Hedged ETF (2621)' has lost -8.2% year-to-date and -4.47% over the past month alone.