Overseas investors buy big in Japan


Japanese investors have continued to buy overseas bonds and stocks but international money is moving into Japan

By Alex Frew McMillan
CNN Hong Kong

TOKYO, Japan (CNN) -- Overseas investors have been buying millions of dollars worth of stock in Japan, data put out by the Ministry of Finance showed on Thursday.

For the week through May 24, Japan saw a "net outflow" of money into its stocks and bonds. But the main driver was Japanese investors, who heavily bought overseas bonds.

That trend has continued as major exporters seek to hedge currency fluctuations and with doubts surrounding long-lasting economic recovery in Japan.

But the Tokyo stock market is once again luring overseas investors, the figures show. For the May 24 week, they bought 436 billion yen ($3.5 billion) in Japanese stock.

That is a net figure after allowing for total sales. Overseas investors have been net buyers Japanese stock since March.

May purchases double the level of March

But the May purchases to date by overseas investors total 874.3 billion yen ($7.0 billion).

That is up 93 percent from the net purchase in March, of 452.0 billion yen, according to figures provided by investment bank J.P. Morgan.

Global investment banks such as ABN Amro have closed their Japanese equity operations altogether. But insurance group AIG is entering the market (full story).

Hedge fund interest in Japan is thought to be rising. Hedge funds, which rarely have to disclose their holdings, own much less of the Japanese stock market than of the markets in Europe and the United States.

There is also mounting evidence that painful economic reforms have been having an effect in Japan, where the economy appears to be rising faster than the United States (full story).

For the 12th straight week, Japanese investors bought more overseas stock than domestic stock.

Tokyo's stock market is lower on Tuesday afternoon, tracking tech losses, but the broad Topix index is now holding steady, down 0.76 percent at 1,117.14.