Foreign investors were net buyers of Japanese equities in October to the tune of ¥3.43 trillion. This represented the largest investment in Japanese equities on record.
There was something poetically ironic about last night’s 800+ point crash in the Nikkei…
… which was saved in the last minutes of trading by what was rumored to be the latest blatant BOJ intervention: it took place right after the month in which a record number of foreigners rushed into Japanese stocks, chasing the record momentum of the Nikkei and Topix.
According to the latest data from the Japanese MOF, in October foreigners made the largest investments ever in Japanese equities in October.
First, what did Japanese investors do? Having as recently as several months ago bought up record amounts of US Treasurys, this enthusiasm has long since vanished, and local investors were net sellers of foreign long-term bonds (-¥1.43 tn) for the second straight month. However, in each month of 2017 so far, Japanese investors have remained net buyers of foreign bonds (excluding banks whose monthly transactions are volatile and also dollar funded), although the pace slowed slightly at +¥727.7 bn, according to Goldman calculations. Trust banks’ investment trust accounts (including pension funds), financial services providers, and life insurers were net buyers, at a stable +¥267.5 bn, +¥659.0 bn, and +¥420.
