In the week ending June 27, foreign investors divested from Japanese equities at the quickest rate observed in approximately three months, capitalising on gains from technology stocks amid elevated valuations following a robust performance in the previous quarter. There has also been increasing concern regarding AI expenditures financed through borrowing. Non-native investors withdrew a net 1.82 trillion yen from Japanese stocks during the week, marking their largest weekly net sales since March 28, according to data released by the Ministry of Finance on Thursday.

The Nikkei 225 rallied 37.21% last quarter, prompting investors to lock in profits in high-flying technology stocks last week. Kioxia 285A and Tokyo Electron 8035 experienced declines of 15.12% and 3.24%, respectively, while SoftBank Group 9984 saw a reduction of 12.45% in light of reports indicating a postponement of OpenAI’s IPO. Japanese long-term bonds experienced foreign outflows for the fourth consecutive week, amounting to 493.7 billion yen. Foreign investors also divested 2.43 trillion yen in short-term bills.

In other developments, Japanese investors engaged in the acquisition of 147.7 billion yen worth of foreign stocks, indicating a second consecutive week of net purchases. In overseas bond markets, Japanese investors halted a three-week trend of purchasing foreign long-term bonds, recording net sales amounting to 280.1 billion yen.