Offshore Flows Into Local Stocks Continue, Bond Flows Remain Volatile

Weekly investment flow data showed a continued inflow into local stocks from offshore investors. The pace of inflows did slow to ¥214.7bn yen, which was down from the prior week, but still marked the fourth straight week of inflows into local equities. It was a different story in terms of bond flows. Offshore investors reversed nearly all of the prior week's inflow, with an outflow of -¥904.2bn. The general trend since mid September has been for outflows (a cumulative -¥2594.9bn), which fits with a firmer Japan yield backdrop over this period.

• In terms of Japan domestic outflows, local investors sold foreign bonds (-¥151.7bn) Still, the general trend in recent months has been to purchase offshore bonds. Also note Nippon Life stated it would buy/sell foreign bonds flexibly as yields and FX shift (see this link).
• Japan outflows to offshore stocks were positive, but remained modest at ¥82.7bn.

Table 1: Japan Weekly Investment Flows