Supported by strong corporate earnings reports, and diminishing enthusiasm over the possibilities of US interest rate cuts, Japanese stocks have seen massive foreign inflows over the week ending November 17th.
According to Japanese exchange data, foreign investors purchased 1.03 trillion yen ($$6.88 billion) in Japanese stocks last week, coming on the heels of about 1.13 trillion yen in net purchases over the previous week.
Foreign investors picked up roughly 667.92 billion yen in derivatives and roughly 362.96 billion yen in cash equities.
US Federal Reserve minutes from the last meeting showed policy makers pledging to “proceed carefully,” which was seen by traders as being expected, and lacking any indication that policymakers would definitely not be pursuing any more rate hikes.
Meanwhile robust earnings reports were boosting Japanese equities. Idemitsu Kosan spiked 22.6% last week following the Japanese refiner increasing its full-year profit estimate. Mizuho Financial Group, the Japanese lender, also raised its income forecast, and saw shares add 3.5% for the week.
Japanese shares extended their gains into a third consecutive week of increases last week, with the Nikkei increasing 3.12%, and the broader Topix index rising roughly 2.33%.
In contrast to the previous year, when Japanese stocks saw about 3.35 trillion yen in outflows, so far this year Japanese equities have seen a net 6.99 trillion yen in foreign capital inflows.
Foreign investors dumped about 2.48 trillion yen into Japanese bonds, marking the most sizable weekly purchase in 10 weeks. On a net basis, they additionally picked up 2.06 trillion yen of short term, and 4.226 billion yen in long-term Japanese debt securities.
Meanwhile, Japanese investors picked up about 246.6 billion yen in foreign bonds over the week, following four consecutive weeks of net selling. They also picked up a net 2.5 billion yen of long-term, and 244.1 billion yen of short-term overseas bonds.
They also picked up a net 120.5 billion in foreign equities last week as well.
