Behind the massive purchases of foreign stocks by Japanese investors were mainly expectations that the Federal Reserve would not tighten its campaign against inflation, which is the highest in the US in the last 40 years.
American companies are thriving
The earnings season also had a positive effect on the interest of Japanese investors, especially in US stocks. US companies have generally reported better-than-expected financial results for the second quarter or first half of this year.
Japanese investors invested the most since 2005
According to the Japanese Ministry of Finance, Japanese investors accumulated foreign stocks worth a total of 1.85 trillion yen in July alone. This is the highest volume since 2005. Approximately half of this amount (755.4 billion yen) was attributable to investment funds, while the remainder was attributable to investments by banking houses.
On the other hand, Japanese investors have been divesting from foreign bonds to a much greater extent. Net sales reached 2.54 trillion yen. July was thus the sixth month in a row that Japanese investors found themselves net sellers of foreign bonds. Most of the sales were of US bonds, followed by European ones.
