Japanese stocks see biggest weekly foreign outflow in over two months

Foreigners sold Japanese shares heavily last week on worries about the possibility of fresh COVID-19 linked activity curbs and rising prospects that the U.S. Federal Reserve will accelerate the pace of unwinding its stimulus support.

Foreigners offloaded stocks worth a net 827.31 billion yen ($7.28 billion) in the week to Dec. 3, marking their biggest weekly net selling since Oct. 1, data from Japanese exchanges showed.

Investors sold a net 707.18 billion yen worth of derivatives and a net 120.13 billion yen in cash equity markets.


However, overseas investors purchased Japanese bonds worth 1.76 trillion yen last week, that marked a fifth consecutive week of net buying, finance ministry data showed.

Last week, Japanese stocks fell further to at least an eight-week low, amid uncertainties about the likely impact of Omicron coronavirus variant on the pace of global economic recovery.

A hawkish tilt at the U.S. Federal Reserve, with the central bank likely to accelerate tapering of its bond-buying program and lift rates as soon as mid-2022, added to the chaos.

The Nikkei share average dropped 2.5 per cent and the Topix index lost 1.37 per cent last week, in their second consecutive week of decline.

This week, Japan shares are set for their first weekly gain in three weeks, as stocks tracked a recovery at the Wall Street amid some optimistic comments from a top U.S. official on the latest variant.

Japanese investors purchased a net 1.22 trillion yen worth of cross-border equities last week, that marked their biggest weekly net buying since at least Jan. 2018, however, they sold overseas bonds of 1.16 trillion yen. ($1 = 113.6400 yen)