Foreign investors return to Japanese stocks on AI rally, US-Iran deal

BENGALURU: Overseas investors resumed buying Japanese shares in the week ended June 20, after three consecutive weeks of selling, as a rally in AI-related equities and a US-Iran deal extending a ceasefire and reopening the Strait of Hormuz improved risk appetite.

They bought a net 479.4 billion yen (US$2.96 billion) of Japanese stocks, their first weekly net purchase since May 23, data from the Ministry of Finance showed on Thursday.

The Nikkei jumped 7.9% last week, marking its strongest weekly gain since August 2024, as the US-Iran deal lifted market sentiment in the oil-import-dependent country.

Chip-related stocks Kioxia and Advantest climbed 33.74% and 16.16%, respectively, while AI data-center materials maker Fujikura surged 21.26%.

Foreign investors have poured about 10.32 trillion yen into Japanese stocks so far this year, nearly 8.5 times the 1.21 trillion yen they bought in the same period last year.

However, foreigners withdrew 593.4 billion yen from Japanese bonds last week, a third consecutive week of net sales. They sold 1.06 trillion yen of long-term bonds and bought 463.9 billion yen of short-term bills.

Elsewhere, Japanese investors snapped up 426.8 billion yen of overseas stocks, their first weekly net purchase since May 16.

They were also net buyers of foreign bonds for a third successive week, purchasing 199.7 billion yen of long-term bonds and 174 billion yen of short-term securities.