Japanese stocks saw a substantial return of foreign capital, with investors pouring a net 2.96 trillion yen ($18.65 billion) in the week ending April 4. This marks a significant reversal after three consecutive weeks of selling.
The Nikkei index rallied approximately 5.39% on Wednesday, coinciding with investor sentiment stabilizing ahead of a reported ceasefire in Iran. Seasonal factors also played a role, as foreign financial institutions typically reallocate holdings back to Tokyo in April after shifting them offshore in March for voting rights and dividend entitlements.
In March, foreign investors had divested nearly 7.37 trillion yen from Japanese equities. The recent inflow was further bolstered by a surge in Japanese government bond yields, which reached a near three-decade high, attracting 2.46 trillion yen into local long-term bonds. Meanwhile, Japanese investors continued their trend of investing in foreign stocks, allocating roughly 1.44 trillion yen.