Japanese investors dump foreign stocks, pile into bonds in July as yen weakens
(Reuters) -Japanese investors sold foreign stocks for a third straight month in July, taking profits after a steep rally left valuations stretched, while channelling large sums into higher-yielding foreign bonds as a weakened yen boosted returns.
According to data from Japan’s Ministry of Finance released on Friday, Japanese investors withdrew approximately 536.4 billion yen ($3.64 billion) from foreign equities in the month.
They had sold 1.99 trillion yen worth of foreign stocks in the previous month.
Meanwhile, Japanese investors snapped up 3.63 trillion yen worth of foreign bonds in July, marking a third monthly net purchase.
The yen < JPY=> dipped approximately 4.5% against the dollar last month, the sharpest for a month since December 2024.
Trust accounts (pension funds) sold foreign stocks and bought long-term bonds on a net basis for a third straight month. They divested a net 1.52 trillion yen worth of foreign equities and bought a net 419.6 billion yen worth of long-term bonds.
July’s net foreign equity investments by Japanese bankers, investment trust management companies and insurers stood at 445.5 billion yen, 333.5 billion yen and 207.1 billion yen, respectively.
Overseas bond markets received 3.82 trillion yen worth of Japanese investments in long-term bonds. Short-term bills, however, logged a net 196.6 billion yen divestment.
Separate data from the Bank of Japan showed that Japanese market participants bought a net 5.73 trillion yen worth of U.S. bonds in the first half of the year, down from net purchases worth 6.4 trillion yen, a year ago.
They also invested 2.37 trillion yen in European debt securities in the first half. French and German bonds received a significant 702 billion yen and 494 billion yen worth of Japanese net investments.
($1 = 147.3800 yen)
With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Unsure where to invest next? Get access to our proven portfolios and discover high-potential opportunities.
In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record.
With portfolios tailored for Dow stocks, S&P stocks, Tech stocks, and Mid Cap stocks, you can explore various wealth-building strategies.
