Foreigners Stay Net Buyers of Japan Stocks for 12th Month

Tokyo, July 5 (Jiji Press)–Foreign investors last month stayed net buyers of Japanese stocks for the 12th straight month as the Japanese market still trailed behind U.S. and European equities, a Tokyo Stock Exchange report showed Thursday.

Nonresidents posted net buying of 1,145,662 million yen in the June 4-29 period, compared with the previous month’s buying excess of 1,289,993 million yen, according to the TSE data based on stock transactions via 63 brokerage houses on the first and second sections of the TSE, the Osaka Securities Exchange and the Nagoya Stock Exchange.

“Foreign investors kept on buying Japanese stocks apparently to maintain the stocks’ portfolio weightings at a steady level, following the recent rises of European and U.S. stocks,” Yutaka Miura, equity manager at Shinko Securities Co., said.

Nonresidents, however, did not intend to actively chase stocks higher, so they placed large net sell orders in index futures, according to Miura. Their futures selling, in turn, capped the cash market’s gains, he pointed out.

The 225-issue Nikkei average rose 179.48 points, or 1.0 pct, in the reporting period to finish Friday at 18,138.36.

The key market gauge made only a gradual advance with its topside capped by jitters about surging long-term interest rates globally and rekindled worries about U.S. subprime mortgage loans. But the Nikkei managed to eclipse its previous year-to-date high marked in late February to hit the highest level in more than seven years thanks to optimism about corporate earnings.

Meanwhile, individual investors stayed net sellers for the third straight month, logging a selling excess of 182,131 million yen against the previous month’s 816,861 million yen.

Individuals apparently moved to cash in recent gains, according to Miura.

The TSE said that last week, foreign investors posted net buying of 30,952 million yen, down sharply from the previous week’s buying excess of 237,264 million yen, staying net buyers for the eighth straight week.

Japanese institutions including banks, insurers, investment trusts and nonfinancial firms all logged net purchases.

In the June 25-29 period, the Nikkei average dropped 50.27 points.

The average daily turnover on the TSE’s first section in the reporting week came to 2,540.8 billion yen against 2,738.3 billion yen in the preceding week.END

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