Foreign capital sustained a multiweek inflow into Japan's equity market, with non-resident investors adding a net 1.08 trillion yen to Japanese stocks in the week ended May 23. That figure marks an increase of nearly 14% from the 948.4 billion yen of net purchases recorded in the previous week, according to data released by the Ministry of Finance on Thursday.
Market participants pointed to a combination of softer oil prices and a sharp upswing in AI-related technology shares as the primary drivers of foreign demand. Momentum in the tech space was amplified after Nvidia outlined a very strong demand outlook for its core AI chips last week, which coincided with sizable gains among Japan-listed technology names. One high-profile AI investor surged 17.62% over the week, while chip designer Socionext advanced 12.26%.
Year-to-date foreign net purchases of Japanese equities have now approached 11.7 trillion yen, a dramatic increase compared with roughly 742.1 billion yen of net buying in the same period a year earlier. The scale of inflows underscores the shifting interest of overseas investors toward Japanese listed companies this year.
Fixed-income flows were mixed. Foreign investors returned to Japanese long-term government bonds with net purchases of 1.35 trillion yen in the latest week, reversing the prior week's 1.03 trillion yen of outflows. The reversal occurred as the earlier bond selloff eased and higher yields attracted buyer interest. Conversely, foreigners were sellers of short-term instruments, divesting 2.22 trillion yen—the largest weekly net sale of short-term paper since March 28.
On the domestic front, Japanese investors continued to trim exposure to overseas equities, withdrawing a net 358.7 billion yen from foreign stocks. This marked their third weekly net sale in four weeks. Despite that pullback, domestic investors modestly extended their purchases of long-term foreign bonds, investing 10.3 billion yen and making it the fourth consecutive week of buying in that category.
Exchange rate terms in the reporting noted $1 = 159.5300 yen.
Context note: All flow figures and market moves are sourced to Ministry of Finance data for the week ended May 23 and activity reported for the immediately preceding week.