Offshore Investors Dump Japan Equities

The highlight from Japan's weekly investment flow data (ending September 15th) was sharp selling of local equities by offshore investors. There were -¥1583.9bn in outflows, the largest since 2019. This build on outflows from the week prior of -¥851.8bn. Offshore investors have now sold local stocks in 4 out of the past 5 weeks. Both the TOPIX and Nikkei hit recent peaks at the end of last week and have fallen sharply this week, although a more hawkish Fed backdrop has been a driving factor as well.

• Offshore investors purchased Japan bonds, +¥439.4bn, up on the prior week's modest inflow.
• In terms of Japan outflows, local investors bought ¥885.5bn of offshore bonds, down from the prior week's sharp outflow. Local investors also purchased offshore stocks but at tepid pace of ¥62.6bn.

Table 1: Japan Weekly Investment Flows

Source: MNI - Market News/Bloomberg