Japanese Investors' Bold Move: Record Foreign Equity Purchases Amid Tariff Tensions

Japanese investors bought a record 1.8 trillion yen in foreign stocks amid U.S. tariff tensions, leveraging a strong yen. Domestic stocks rebounded 8.4% following a tariff pause by the U.S. MSCI World Index rose, while investors also sold off long-term foreign bonds significantly.

In a significant financial shift, Japanese investors have turned their attention to foreign equities, breaking previous records with purchases amounting to 1.8 trillion yen ($12.26 billion) in the week leading to April 5. This comes as domestic shares face pressure from aggressive U.S. tariff measures under President Donald Trump.

The yen's strength, trading near a six-month high against the dollar, has amplified Japanese investors' purchasing power in the international markets. In parallel, Japan's Nikkei index witnessed a notable recovery, climbing 8.4% following Trump's announcement of a temporary tariff pause for several nations, including Japan.

While global indices like the MSCI World Index recuperated earlier losses, Japanese investors simultaneously disposed of 2.57 trillion yen in long-term foreign bonds, marking the largest weekly net sale since November. Foreign investments reversed their nine-week sell-off streak in Japanese markets, signaling renewed interest from abroad.

(With inputs from agencies.)