Japanese stocks saw their biggest weekly foreign outflows in 18 months through March 21, asMiddle East oil production disruptionsstoked concerns over inflation and the pace of potential Bank of Japan rate hikes.
Foreign investors sold roughly 2.51 trillion yen ($15.74 billion) in Japanese stocks last week, marking their largest weekly net outflow since September 14, 2024, according to data from Japan’s Ministry of Finance on Thursday.
Last week, the BOJ left its short-term policy rate unchanged at 0.75% but warned that a surge in oil prices, stemming from the Iran war, could heap inflationary pressures, signaling a need for accelerated interest rate increases.
The Nikkei reached a week’s high of 54,175.8 on Thursday on cautious optimism that tensions in the Middle East could ease.
In the past week, foreign investors purchased around 511.5 billion yen in Japanese long-term bonds and about 2 trillion yen in short-term debt securities, marking their largest weekly net buying in roughly 2-1/2 months.
The two-year JGB yield rose to a nearly three-decade high of 1.32% on Thursday, supported by prospects of a rate hike in April.
At the same time, Japanese weekly net investments in foreign stocks eased to a five-week low of 31.2 billion yen.
In overseas bond markets, Japanese investors were net sellers for a second successive week as they divested roughly 635.3 billion yen pf foreign long-term bonds.
($1 = 159.4800 yen)
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