Japanese Investors Sell Overseas Stocks

(Reuters) – Japanese investors sold overseas stocks for a second consecutive month in November, aiming to capitalize on strong global equity gains, particularly as U.S. stocks hit record highs.

According to data from Japan's Ministry of Finance, these investors net sold 1.22 trillion yen ($8.12 billion) worth of overseas stocks last month, following approximately 2.37 trillion yen worth of net withdrawals in the previous month.

Japanese trust accounts divested foreign stocks worth a net 1.33 trillion yen, marking their third consecutive month of net sales. Conversely, investment trust management companies purchased 550.5 billion yen worth of shares, the highest amount in three months.

Barclays reported that trust accounts experienced significant net sales, likely due to the need to rebalance portfolios following strong U.S. equity performance. The heavy purchases from investment trusts were likely influenced by renewed interest in NISA-linked investment flows.

NISA, or the Nippon Individual Savings Account, is a Japanese government tax-free stock investment program aimed at transforming the trillions of yen held in cash by households into stock market investments.

Data from the Bank of Japan shows that Japanese investors sold a net 1.33 trillion yen worth of U.S. equities in the year leading up to October. They also divested a net 412 billion yen and 162.2 billion yen worth of European and British stocks in the same timeframe.

Additionally, local investors sold a net 432.8 billion yen worth of debt securities in November, continuing a trend of net sales for the second consecutive month, according to Ministry of Finance data.

($1 = 150.3300 yen)